If someone were to ask a small business owner like yourself what one of the most tedious tasks in your business was, the answer would most likely be bookkeeping, right?

Bookkeeping entails documenting, classifying, and organizing all financial records of your small business, including recording every transaction and filing away every bill and receipt connected to the business. But frustrating as it can be, any errors in bookkeeping can cost any business heavily. Whether we like it or not, a sound bookkeeping system is like a business’s heartbeat.

Why Is Bookkeeping Important?

A business without a sound bookkeeping system can seriously handicap growth prospects. Here is why the seemingly mundane job of bookkeeping is a silent hero in the story of your small business’s success.

• For Effective Monitoring – Why do we take regular health checkups? Not because we want any anomalies to show up but to ensure we are fit and fine! Doing a proper checkup tells us the exact status of our physical health, complete with our blood pressure and pulse rates, making us know for sure that everything’s A-OK. A sound bookkeeping system does the same for a business. While you might feel like all the effort into compiling records and updating them is a waste as there is no problem in the industry, it’s an alarm for when any anomaly does creep into the system. The more detailed and updated your bookkeeping system, the easier and quicker it is to detect any irregularities or errors in your business transactions. And the earlier you can spot them, the faster you can remedy them. It is important because while some irregularities might simply be a human error or overlook, some might indicate a potential fraud attempt. Either way, a sound bookkeeping system can help save your business from a significant financial crisis. When all your financial records are properly stored and managed, monitoring them becomes much easier and more effective, saving a lot of time and mental stress for you as a small business owner.
• For Better Business Efficiency – If a healthy cash flow is the pulse of a successful and sustainable business, then bookkeeping is the heart that regulates this pulse. Good bookkeeping helps track and identify any cash flow issues, such as shortage or surplus cash flow, at certain times. Additionally, tracking invoices, ensuring timely payments from customers and prompt payments to vendors keeps your business operations streamlined. With your cash flow and operations running efficiently, you can make the most of the available resources and use them optimally to take your small business to the next level.
• For Constructive Growth Planning – As mentioned earlier, a good bookkeeping system reflects the proper financial health of your business. And only a healthy small business can confidently consider growth and expansion. Your small business’s past and current financial records act as the blueprint for your future by giving you an honest picture of where your business stands and what needs to be done to take it further. Where do you stand in terms of investments, are your supply chains in place, is there any scope for cost-cutting, what kind of consumer patterns or trends do you need to look out for – the answers to all these questions lie in your past financial records which are duly maintained by the bookkeeping system.
• For Showcasing Plans to Investors – Having identified the things you need to work on, the next step to business growth is getting your stakeholders, suppliers and potential investors to back your expansion plan. For this, you will need to provide them with specific data and reports that can convince them of the soundness of your plans. A well-organized bookkeeping system can help you by making all necessary data promptly available as and when required.
• For Regulatory Compliance: A business has to comply with various regulatory requirements, such as labour laws, licensing requirements, copyrights and patent filing, environmental regulations, and more. All legal compliance needs documentation. A skilled bookkeeper will ensure all documents are filed and stored for any future compliance. It can save your business from compliance issues and hefty penalties. 
• For Informed Business Decisions: A robust bookkeeping system can keep you updated with your business’s most important figures and updates and help you make informed business decisions. For instance, a payroll analysis can give you a fair idea about the available budget for hiring new employees. Skimming through the asset purchases can help you make an efficient budget for future asset buying. 
• For Tax Purposes: Searching for receipts and financial records when the taxman comes knocking is highly stressful. But with a diligent bookkeeping system, filing taxes becomes very easy indeed. Even in case of an audit or query from the CRA, getting your hands on the relevant data becomes much quicker because the bookkeeper stores it in an organized manner. And as we all know, a smooth tax season helps dissolve a chunk of your business stress as a small business owner.

Though bookkeeping may seem easy, it’s an intricate responsibility that needs an alert mind with high concentration and reliability. As a small business owner, you might have initially done the bookkeeping yourself, but you will struggle for time as your business grows. Bookkeeping is a time-consuming task and with so much pressure on your own time, it would be advisable to entrust the job to a reliable and professional agency. That way, you can focus on growing your business without stressing about organizing your financial records. The sooner you do it, the better it can support your growth plans.

Contact Glenn Graydon Wright LLP in Oakville to Help You with Your Accounting and Bookkeeping  

Talk to a skilled accountant/bookkeeper to help you organize your books of accounts. At Glenn Graydon Wright LLP, our bookkeepers and accountants can provide services such as recording transactions and setting up accounting systems. To learn more about how  Glenn Graydon Wright LLP can provide you with the best accounting and bookkeeping expertise, call us today at 905-845-6633 or connect with us online to schedule an initial consultation.