What is bookkeeping?
Bookkeeping is the recording of financial transactions in a business and involves preparing and recording all source documents from purchases and sales to receipts and payments.
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Bookkeeping helps in three major ways:
Managing Finances
Bookkeeping allows you to keep track of your business’s finances. With accurate information, you will have a clearer picture on how your revenue is being spent. A bookkeeper will also provide advice on bill payments and invoicing. Managing cash flow is a critical process within the day-to-day operations of a business, and having a clear picture of your payables and receivables is important to managing your bank balance.
Organisation
Having accurate and timely financial records at your fingertips will allow you to manage your business in a more organised way. Not only will these records help you make better business decisions, they're also important to potential stakeholders.
Anyone who is considering providing you with working capital, such as a vendor, bank or investor, will want to see your financial information. Being able to provide this information quickly and accurately will ensure a positive relationship with stakeholders.
Tax time
Getting a Tax Agent to lodge your end of year financials quickly means they need information that is accurate and on time. A bookkeeper will take care of this.
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Plus, keeping financial records for your business is required by law. Not having records could lead to large penalties or worse, cause your business to be legally closed down.
