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?

Do you have a backlog of transactions that need urgent attention?

Don’t worry; we help you resolve your bookkeeping backlogs within 24 hours (based on urgency) at no extra cost.

We work for you at your convenience, be it for your business tax returns, audits, forecasting, or developing cash flow growth strategies; our team of experienced accountants and bookkeepers can be contacted anytime, at your convenience.

Contact The Kalculators today for a discussion of your requirements.

Give us a call today on (08) 7480 2593 to find out how we may assist your business to reduce costs and boost profits.

Frequently Asked Questions

Why is bookkeeping important?

Bookkeeping plays a vital role in managing your business's finances. Maintaining accurate and up-to-date records allows you to make informed decisions, track cash flow, identify trends, and comply with financial regulations.

What types of businesses can benefit from bookkeeping?

Bookkeeping can be beneficial for businesses of any type and size. Whether a sole proprietorship or a large corporation, maintaining accurate financial records is essential for making informed decisions, managing expenses, and tracking profitability. Read more on how a certified bookkeeper can help your business in Adelaide. 

When is the best time to start Bookkeeping?

The best time to start a bookkeeping system is when your business is first established. By establishing a solid bookkeeping foundation, you can streamline processes, avoid confusion, and make informed decisions based on accurate financial data.

How can bookkeeping improve your business's financial situation?

Bookkeeping can help your business finances in the following ways:

• Bookkeeping ensures that your financial records are complete and accurate. By maintaining complete records, you can generate accurate financial reports such as balance sheets, income statements, and cash flow statements. These reports provide valuable insights into your business's financial health and allow you to make informed financial decisions.
• Bookkeeping helps you monitor your business's cash flow. By tracking income and expenses, you can identify areas of improvement and optimise your cash flow. This, in turn, helps manage expenses, reduce debt, and ensure sufficient funds for business operations.
• Accurate bookkeeping is essential for tax planning and compliance. You can minimise your tax liability by identifying tax-deductible expenses, maximising deductions, and properly reporting taxes. Proper bookkeeping also helps avoid penalties and fines due to incorrect tax filings or non-compliance.
• Reliable and accurate bookkeeping data provides valuable insights into your business's financial performance. You can make informed business decisions such as budgeting, forecasting, and cost management by analysing financial reports such as profit and loss statements and balance sheets.
• Regular bookkeeping helps you clearly overview your business's financial status. You can track financial performance, identify trends, and make informed decisions by providing timely financial updates and reports. This transparency enables better communication with stakeholders, investors, and lenders.

Can I do this myself?

While it is possible to handle bookkeeping tasks in-house, it is generally not recommended. Bookkeeping requires specialised knowledge and skills, as well as attention to detail. Hiring an experienced bookkeeper or outsourcing the task to a professional accounting firm can provide peace of mind and ensure that the financial records are accurate and up-to-date.

What are the benefits of outsourcing bookkeeping?

There are several benefits of outsourcing bookkeeping to small businesses. These include

• Expertise: Professional bookkeepers are trained and experienced in managing financial records. They possess the skills and knowledge to handle complex bookkeeping tasks, ensuring accuracy and efficiency.
• Time savings: Outsourcing bookkeeping allows you to delegate time-consuming tasks to professionals, freeing time to focus on core business activities.
• Cost savings: Hiring an in-house bookkeeper can be expensive. Outsourcing to a bookkeeping firm can save costs, as you don't have to invest in equipment or staff training.
• Confidentiality: Outsourcing your bookkeeping to a trusted professional ensures the confidentiality of your financial records.
• Regular updates: Professional bookkeepers can provide regular financial updates and reports, enabling you to stay informed about your business's financial health.