If your business bookkeeping system is not up to date then you are running your business blind. However, your business bookkeeper can take your blindfold off and open your eyes to the financial state of your business. How can you make decisions without accurate financial information? How can you even begin to plan how to grow your business without current income and expense figures? In my eyes you can't. Here is what is going on beyond that financial blindfold:
Income and expenses
It is amazing to me that many business owners have no idea where their business is currently at. Many business owners approach us at some point during the year (typically later in the year) for bookkeeping help and they haven't done any bookkeeping yet. How can you make any financial business decisions without knowing your current financial state?
Cash flow and accounts receivable
Cash flow is so important to a new business. Heck, cash flow is important to any business no matter how mature the company is. A very common problem is that a business is selling their product or service like crazy but they don't have any money in the bank. When we dig in and reveal the cause of the problem it always lies in accounts receivable. Staying on top of invoicing and your accounts receivable will boost your cash flow and keep you in business.
If you have updated income and expense figures and you are staying on top of your accounts receivable you can begin to put some financial forecasting in place. Forecasting is impossible without accurate books and you can only have accurate books through monthly account reconciliations. Forecasting is an important step for a business to take, yet many businesses fail to even produce up to date bookkeeping which makes forecasting impossible.
A growth plan
You have accurate up to date books, a handle on your cash flow and you have put together some sort of financial forecast. Now it is time for the fun stuff; growing your business. Very few businesses do not want to grow. Most want to grow but are not 100% certain how to grow. While there is much more to growth than just the financial aspect, a good look at your current financial situation can help you with your business growth plan.
As you can see there is a lot of valuable information behind your financial blindfold and they are all related to one another. Make sure your business bookkeeping is up to date, get a handle on your cash flow, make a financial forecast and grow your business.
Do you have any sort of bookkeeping system in place?
Is your bookkeeping up to date and accurate?