In today’s digital times, you may be used to unlimited, live access to your financial numbers and cashflow metrics. But without good bookkeeping to keep the data up-to-date, the quality of your reporting will suffer. And if your books aren’t in the cloud yet, you will be amazed once you can access your books online from anywhere.
So why is fast and accurate bookkeeping so important? And what are the main bookkeeping tasks that your business should be getting right?
The financial importance of good bookkeeping
Bookkeeping is a fundamental part of your financial process as a business. Without it, your accounting software has no financial data to work with, your financial reports don’t have the most current numbers, and you can’t see the current financial health of your business.
Inputting your financial transactions into some form of record-keeping system essential for filing timely and accurate tax returns. Bookkeeping is what provides you with a historic breadcrumb trail of your finances – allowing you to track your cashflow, revenues and profits over a given period.
How to maximize your bookkeeping
Bookkeeping is a vital part of your financial management, and is the key to having your transactions recorded, available for reporting, and accessible whenever you need them.
But how should the bookkeeping process work, in an ideal world? Let’s walk through the core bookkeeping steps and how you can get the most from this financial admin task.
To keep on top of your bookkeeping:
- Record all transactions immediately – getting your transactions recorded and in the books right away is vital. This includes recording both your income and expenses as soon as they occur. This not only helps you stay organized but also means your financial data is always up-to-date and can provide real-time reporting and numbers.
- Categorize transactions accurately – when recording transactions, make sure you categorize each item correctly. This helps you track your spending and income more accurately, so your reports are an honest reflection of your financial health.
- Reconcile your accounts regularly – reconciliation is the process of matching your transactions (both income and expenses) against your bank, credit card, loan statements, etc. It’s a key part of your bookkeeping and should be done regularly, to ensure that your balances are correct and that your records are up to date.
- Use a cloud-based accounting system – bookkeeping doesn’t involve books (ledgers, in accounting-speak) anymore. In the digital world, you can use cloud-based accounting software, like QuickBooks Online or Xero, to record your transactions and access your financial data in the cloud from anywhere, at any time. This makes it easier to keep on top of your numbers when out of the office and to easily allow others to access them as well.
- Outsource your bookkeeping to a professional – yes, you can do your own bookkeeping. But there’s a lot of value to delegating all the hard work to a professional bookkeeper. If you don’t have the time or expertise to manage your bookkeeping yourself, outsourcing is a smart move. A bookkeeper will make sure your books are always accurate and current. Plus they can produce financial statements that enable you to track spending over time, spending related to projects, or the margins of multiple revenue streams, all of which can provide critical information for your business decision-making.
Talk to us about outsourcing your booking
With today’s cloud accounting software, bookkeeping is a far less tedious task than it used to be. But it’s still a regular, time-consuming job that can take you away from running the business.
If you’re thinking about outsourcing your bookkeeping and freeing up your time to work on growing your business, we’d love to talk to you. Our outsourced bookkeeping service will take on your bookkeeping tasks. We can also set up systems for payroll, bill pay, receipt capture, and more.
Let us do the books, so you can get back to doing what you love. Schedule a chat here – as always consultations are complementary, no-pressure, and no-obligation.
