4 Reasons to Handle Your Bookkeeping Monthly

Bookkeeping has always been a pain point for Entrepreneurs. It is, perhaps, the un-sexiest way to spend your time. Who has time to think about books when you’re busy growing your business? But unfortunately bookkeeping and taxes are a necessary evil. Here are 5 reasons your businesses books should be done monthly throughout the year, and not just at tax time.

Better financial decision-making:

It allows you to make informed decisions about investments, expansion, and managing expenses. With up-to-date financial data, you can measure the success of your business strategies and pivot if needed. In this way, you’ll be able to more swiftly take action, rather than notice problems weeks or months later.

Save you $$$ on tax preparation: By having your books reconciled monthly, at year end you can hand your tax preparer or accountant a detailed profit and loss statement. This makes their job a LOT easier. Without digging through bank statements and receipts, they can get right to preparing your tax return. Tax preparation rates are often much higher than bookkeeping prices, so it’s usually better to pay a bookkeeper to do the books, not the tax preparer.

Improved cash flow management:

Up-to-date bookkeeping helps you stay on top of your cash flow. You can monitor your income and expenses in real-time and identify any areas where you may be overspending. Maintaining a positive cash flow ensures you have enough funds to cover your business's operating expenses and invest in growth opportunities.

It's Easier to Apply for Loans:

Applying for loans has become a much simpler process in today's digital age. Thanks to advancements in technology, businesses can now easily access and present their financial information to lenders. This is made possible by having up-to-date financial statements, which play a crucial role in loan applications. The three key financial statements that are commonly required by lenders are the income statement, the balance sheet, and the cash flow statement. These statements provide an overview of a business's financial performance, assets and liabilities, and cash inflows and outflows. By having accurate and up-to-date books and financial statements, businesses can streamline the loan application process and increase their chances of getting approved for the funding they need.

Be Ready for Emergencies:

Being prepared for emergencies is essential to ensure financial stability and peace of mind. One key aspect of emergency preparedness is having an emergency fund. It acts as a safety net, providing a financial cushion to fall back on when unexpected expenses arise. Having an emergency fund allows businesses to handle unforeseen circumstances without resorting to high-interest loans or accumulating debt. It provides a sense of security and empowers individuals to face emergencies confidently. While building an emergency fund may take time and discipline, but it is worth the long run effort. Through diligent bookkeeping, having money set aside for any kind of emergency that falls upon your business can help it stay afloat when it matters most.

Many Entrepreneurs avoid the perceived expense of a monthly bookkeeping service, but that could be a costly mistake. The smart money knows the value of being on top of your taxes and expenses before it’s too late.

We’d love to help you get your bookkeeping on track.