Why Business Owners Must Keep Their Books Up to Date

Running a business comes with many responsibilities and challenges, one of which is the need to keep an ongoing ledger of accounting records. Most online banking interfaces or payment gateways like PayPal provide all the info you need to review financial transactions in retrospect, but it’s still wise to also log your financial information within an accounting software like QuickBooks on an ongoing basis. While you may be tempted to update your records once a month to make things easier on yourself, that could be making things harder than they have to be. With that said, here are a few reasons why every business should keep their books up-to-date at all times.

Accurate Accounting for Proper Tax Filing

If you’re running a busy company, you should consider updating and maintaining your records daily, or at least twice per week. Inputting important records into an accounting software on a same-day basis will help you keep more detailed records with notes and memos related to dates, reminders, and other pertinent info. The increased accuracy of your accounting will also make it easier to file your tax return and will lower your chance of being audited.

Assessing and Analyzing Performance

When you do your accounting monthly or every other week, you can’t really hone in on the week-to-week changes that occur after you’ve made adjustments or following a major corporate event like a sale or the completion of a project. On the other hand, when you’re reviewing and revisiting your records regularly, you can notice short-term trends and devise better strategies to adjust accordingly. More accurate and fully updated records allow for real-time analysis, which isn’t possible if your newest accounting records are already two weeks old.

Preventing the Need to Play Catch-Up

Nobody likes to feel like they’re behind, and yet that’s the exact position that many business owners put themselves in by not keeping their records up-to-date. By doing the accounting gradually as you go along, you can avoid the frantic last-minute accounting jams and save the money that you would have had to spend on an accountant. Having to catch up on accounting can be particularly stressful if you’re facing an audit or when tax lodging day is fast approaching. Don’t be part of the group of business owners that procrastinates on record keeping, because it’ll only increase the pressure and complication later on.

Avoiding Mistakes with a Record-Keeping Routine

Finally, recording your business activity should become part of your daily routine because it helps you remember the events tied to your accounting record. If you are documenting the events and transactions on the same day that they occurred, then you’re more likely to remember more of the specifics if you ever need to recall something related to that project, client, or transaction later on. Recordkeeping is a simple task that can be squeezed into the last ten minutes of your workday once you’ve got a system down. Instead of relying on your memory and updating everything once or twice a month, or when tax time rolls around, consider the benefits of taking a slow, steady, and proactive approach.

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