Can Bookkeeping improve your business financial situation?

Bookkeeping is crucial for businesses planning to invest in tangible and intangible resources. However, business owners must analyse their financial statements with adequate reports to make those investments. Many individuals simply misunderstand this fact by comparing the profits & losses. However, unforeseen expenses such as your payable taxes or lodgements are highly ignored. According to Kaleem, The Kalculators’ CEO and founder, Accounting receivable ledgers must be tracked daily; this is precisely where the issue with late payments needs to be addressed. Moreover, providing business owners with complete financial information can help individuals reduce their tax payables significantly. In this exclusive read, our director, Kaleem Ulah, talks about bookkeeping as an antidote to the posed financial challenges faced by SMBs.

How Bookkeeping helps Businesses Financial Situation

Remarking on the importance of organising your books & addressing minor changes can go a long way. For example, Kaleem recommends that café owners reduce their costs by $1 per takeaway box if they switch to a much more renewable option; hence, if a café provides 20 takeaway containers daily, that would be $20 worth of savings. This amounts to nearly $7k worth of savings that machinery can divest quickly. According to research conducted by Xero, SMBs switching to cloud-based practices have a year–over–year growth in revenue by 15 per cent.

One of the most sought-after advice for business owners would be, “Stay consistent and persistent”, says Kaleem. Many companies are in a mess with their financial records, which creates discrepancies in their reconciliation process. However, this causes a loss of time and money. Moreover, working with professionals may help you build a systematic workflow by reducing costs and making smarter investments.

A noticeable observation was the amount of time and money spent on setup and training costs by business owners to do their books on their own. This diverts them from focusing on activities that matter the most, such as customer service, equipment handling, or marketing, to promote their business. Let's get into more ways bookkeeping can boost your business's financial situation.

• 1. Better Financial Decisions

  
  When you make choices based on correct financial records, you can be sure you are making smart ones. When business owners have accurate information about their cash flow, income, and losses, they can make smart choices that will affect the future of their companies. Imagine deciding what to do when you don't know how much money you have or if you are spending more than you are earning. If you keep good financial records, you can keep an eye on how your business is doing and decide where to put your money, how to cut costs, and how to grow and expand your business eventually. As a small business owner, whether you are just starting or have been in business for years, making sure that your financial records are correct should always be your first concern.

• 2. Keeps Track of your Finances

  
  Having up-to-date and trusted books is not only a good idea, it's a must. The company's financial health can be seen in the books, which are also used to make essential choices. There can be terrible results in the future, though, if there is even the smallest mistake in the books. That's why hiring a good bookkeeper who knows how to do everything correctly is important. If your books are correct and reliable, you can make smart choices to help your business's bottom line.

• 3. Helps Businesses with Tax

  
  If you own a business, the last thing you want is to get hit with big fines and fees for having wrong financial records. It's important to keep correct and up-to-date records, especially when it comes to tax deadlines. If you want to stay on top of your earnings and make sure everything is in order, a good bookkeeper can be very helpful. Hiring a professional bookkeeper will give you peace of mind because you will know that your records are in good hands. They can help you escape fines and give you useful information about the financial health of your business. They can also help you plan for the future.

• 4. Use New Technologies to your Advantage

  
  Lastly, you should keep an eye on the newest technologies so that you can use them as soon as possible. There is a reason why the new tools are coming out. They can help you get better at accounting in general. Blockchain, cognitive computing, and robotic process automation (RPA) are a few examples. For those who don't know, RPA is actually server-based and mixes different tasks with business rules or decision models so that they can be done without much human supervision.

“With green and timely compliance of requirements, a bookkeeper is not an additional cost, but an investment” - Kaleem Ulah

Final Thoughts

As accountants, we support individuals & businesses to comply timely with their tax obligations and help our clients save money. However, what is the safest bet for businesses? Is it the Australian Taxation Office (ATO) adapting to “Work from home” changes? Or resolving challenges arising from inconsistencies in recognising income from your books?

With over 800 bookkeeping clients, The Kalculators has successfully managed to support businesses during the pandemic. Moreover, it helps them reduce unnecessary costs by almost 37 percent.

Do you need to get your BAS done today?