NAPA – North Adriatic Ports Association

Why It’s Important For You To Understand Your Business Finances

You should have a complete understanding of your business finances if you want to ensure smooth operations and grow your business. I learned my lesson of the importance of being always aware of my business finances when I was running Archway Books. It is a chain of bookshops in underserved communities across north of England. It took me only a few minutes each day to calculate the cash and add numbers to spreadsheets. Please see Bould Bookkeeping for all your bookkeeping needs!

It helped me immensely in keeping track of the overall sales generated by my bookshop chain. It also gave me a bird’s eye view of the increase or decrease in sales as compared to last week, month, or year. It also ensured that I was always aware of the cash flow and growth of my business. Being aware of the financials of my business also allowed me to send invoices on time as well as collect any late payments before sending out more books. It also helped with bank reconciliation and essentially, the system became the foundation of running my business.

I personally like working with numbers. Perhaps, this is why I never found it to be something complicated. However, everyone isn’t fond of dealing with numbers. In fact, most business owners don’t really think of bookkeeping when they are first establishing their business. Keeping accurate financial records is not high on their priority list. If that’s the case with you, you should seriously consider outsourcing your business financials to a specialist bookkeeper. One fine example of a specialist bookkeeper is Bould Bookkeeping.

The Importance of Bookkeeping

Running a business involves a lot of things and all of those things are important such as customer relations, marketing and technology, among others. Effective bookkeeping is also one of the core fundamentals of running a successful business. It will become infinitely more important when you eventually think of expanding your business in the future.

You can always learn everything needed to become an effective bookkeeper for your business but it will take a lot of time. Most business owners do not have enough time to learn a completely new skill but thankfully, you also have the option of outsourcing to experienced specialists.

When you decide to outsource bookkeeping for your business, you should choose a partner on the basis of value they add to your business instead of choosing someone solely on price. For example, when you have a professional keeping track of your company finances, you get peace of mind, and it allows you to focus your time on your core business which is serving your clients or customers.

Technology has made automated bookkeeping much more efficient and these days, you can get a variety of extensive reports. All these reports will help you better understand the financial position of your business. You need to make sure that you fully understand various reports such as a profit and loss reports, statement of financial position as well as your overall balance sheet. Balance Sheet is a report that shows the complete financial position of your company at a given point in time. Don’t forget to check the asset depreciation report. Bookkeeping involves a variety of financial terms and all these terms might seem daunting at the very beginning.

However, you can’t ignore the fact that bookkeeping is central to your business. Efficient bookkeeping helps you avoid penalties for late submissions of accounting statements. It also helps you keep up to date financial position of your company finances and cash flow, and this is important for a business.

Many businesses are in the habit of checking their accounts only at the end of the year during tax season when they hire a professional accountant. However, business finances are too important to be ignored and should be checked regularly, either by the business owner or the bookkeeper. By keeping close track of your company finances, you get to monitor a number of indicators for your business. Some of these indicators include expected turnover, net and gross profit margins, and a lot more. All these indicators should help the cash flow of your business.