Bookkeeping and Business Growth: How They Go Hand-in-Hand

When most people think of business growth, they usually think about something like sales or marketing – something that plays a direct role in bringing money into the business.

But keeping track of your money is just as important as bringing it in. For example, tracking your money can help you keep more of it by making sure you aren’t spending it on things you aren’t using or paying more in taxes than you need to be paying. This is where bookkeeping comes into play.

Bookkeeping can also help you take your business to the next level by giving you the information you need to make strategic decisions for growing your business.

That’s pretty vague, so let’s talk about some of the specific ways you can use bookkeeping to make your business more efficient and profitable.

Manage Your Cash Flow

If cash flow is the lifeblood of a business, then tracking your cash flow is like taking the pulse of your business. Is it a strong, healthy pulse? Is it weak? Is it fluttering?

If your business is struggling, your cash flow will provide the first signs something is wrong. The problem is too many business owners don’t track their cash flow – or don’t track it the right way.

If you wait to check in on your cash flow, you can get yourself into serious trouble without even realizing it. By the time you do realize it, it might be too late to course correct.

By contrast, when you have someone on your team who is committed to regularly tracking and managing your cash flow, you (and your business) reap the rewards, including:

1. Seeing where your money is coming from so you can spend more time and energy on those avenues of income
2. Seeing what you’re spending money on that’s not bringing a return on the investment so you can either stop wasting your money or find ways to make those resources more profitable
3. Getting early warnings your business might be in trouble and you need to either pull back on your spending or invest in different resources

You went into business to make money, not waste it, which is why it’s so important to have a good bookkeeper make sure your business is making the most of its resources.

Make Better Business Decisions

When you’re consistently keeping track of where your money is coming from, you can make better decisions about where to invest your company’s resources to get an even higher return on your investments.

Here are some crucial business decisions almost every business needs to face at one point or another that can benefit from the input of a good bookkeeper:

1. Does it make sense to add a new line of products/services?
2. Should we expand our offerings in this category?
3. Can we afford to take on more staff? If so, which positions should we fill first?
4. Can we afford to invest in new equipment? If so, which equipment offers the highest potential for ROI?

Bookkeeping takes a lot of the guesswork out of making business decisions. That means you can make business decisions faster, with more confidence, and with better results.

Taxes and Compliance

Everyone hates Tax Day. For many of us (especially business owners,) we hate the amount of paperwork and hours involved in getting ready to pay taxes at least as much as we hate paying up.

Having someone who consistently keeps up with your bookkeeping makes getting ready for Tax Day so much easier. All your financial statements are already in order. All that’s left to do is fill in the blanks on the tax documents. Nothing could be easier.

Keeping up with your bookkeeping is also a great way to make sure you don’t get in trouble with the IRS. When you have all your financial statements ready to be pulled out at a moment’s notice to prove you paid every cent you owe, you don’t have to worry about getting on the wrong side of the IRS.

If you work in a heavily regulated industry, you probably have to account for all the money your business spends, as well as the work you did to earn the revenue that came in. Bookkeeping keeps track of all that for you, so you never have to worry about scrambling to find receipts or bank statements.

Where to Find Help

Depending on the size of your business, you might need someone on your team who can be devoted to managing your books full-time. But if you’re still growing and you need help on a part-time basis, it might make sense to hire an outsourced Bookkeeping Doctor, such as myself.

To get an idea as to whether it makes sense for us to work together, just fill out this form and then schedule a time for us to chat.