6 REASONS TO DO BOOKKEEPING

Bookkeeping is the process of recording all the financial transactions and events that occur in your business.

Many business owners are skeptical to hire a bookkeeping service to track their expense. They feel it is an unnecessary cost and some feel uncomfortable to give their information to others. Well these concerns are valid but there are many advantages of hiring a party to handle all your accounts.

Ease in Financial Decisions:

Bookkeeping allows you to see whether your earnings are enough to fullfill your expenses and gives you information that helps in your financial decisions. If you are not making enough to fulfill your expenses and still reap enough profit, for example, then based on the details in your records, you can decide where to increase earnings or decrease costs.

Time Management:

The bottom line is it takes time to keep your own books; this is time you could be spending on other areas of your business.

Meeting With Deadlines:

Bookkeeping accounting will help your small business meet deadlines and help you make timely payments of loans, rents, bills, and so on.

Performance Evaluation:

Bookkeeping accounting will help you evaluate the performance of your small business to know if your small business is dormant, depreciating or growing. When you know the performance level of your business, you can plan and make certain adjustments on your business.

Fulfillment of Tax Obligations: 

Bookkeeping keeps track on any information and documents in order to accomplish annual taxes. You don’t have to rush anymore to find all those bills or try remembering expenses when tax time comes. Tax returns are also made easier with an organized Balance Sheet, Cash Flow and Profit & Loss, your tax advisor will devote time in giving you sound tax advice instead of correcting entries in the financial statements.

Business Planning is Easy: 

What you need is only the Balance Sheet and Profit & Loss to check if the company is on the right track financially, from there you can start your business planning so much easy.

So the final note says, proper bookkeeping accounting will help you compare your present financial status to previous year records at any point in time. This will in turn help you analyze your growth rate.

HOW TO ESTABLISH YOUR BUSINESS

So you are going to start a business but not sure about the procedures to follow. In order to guide you through the steps we have gathered some procedures at one place. These are some important and mandatory points you should remember while starting a business.

MARKET RESEARCHAND PLAN: Before you move forward, do some research to know the market for your products and services. Make sure that there is a market for your product and know how much you will need to invest. Write a business plan or get it written. As you are new to the business world it might be helpful to have someone guiding you through the process.

CHOOSE THE BUSINESS LOCATION: To setup your office choose a location that is suitable for your business. Which type of business you are starting is the main factor for deciding the location. And when you are done with deciding, make sure that you are complying with all the laws in the city.

FINANCE YOUR BUSINESS: As everyone knows it takes money to earn money. So depending upon the nature of your business you can do bootstrapping or you can look for investors and venture capitalists.

REGISTER YOUR BUSINESS NAME: A business name should be different than your name and your partner’s name and its more better if it gives your customers an idea of what you do. So the next step is registering your business name with your state government.

GET A TAX IDENTIFICATION NUMBER AND REGISTER IT: Tax identification number is required for paying federal, state and local taxes. Every organization needs to obtain this number from IRS.

BUSINESS LICENSES AND PERMITS: Every business needs a basic business operating license from the government, so depending on the type of business you do get your special permits as it is important to secure these permits as early as possible so that you operate legally when you finally start your business.

So make sure that you carry out all these procedures compulsorily and run your business with all legal formalities being completed.

DRAWBACKS OF USING BUSINESS PLAN SOFTWARE

Are you on the verge of getting the business plan done using the so called software? Well, take a break and read this!

There are many ways of getting a business plan done. You can write it yourself, outsource it to get it done for you or using the software. Depending on your professional background you can choose to write it yourself or with the help of software. However business plan software has their own drawbacks compared to hiring a professional. Some of the drawbacks are:

The Plan Will Look like Everyone Else’s: The software packages generally have the same formatting and almost same points for the business plan. The software made plan can be identified immediately by the investors and it may lead you to unsuccessful pitching.

No Consulting Means No Expert Advice: while using software does help you to complete your business plan and may be free of cost, but having an expert’s advice can keep you from making critical mistakes and may increase your chances of getting funded.

Less Experience than a Professional:  A professional knows what and how to write a business plan and all the tits and bits to make it stand out to investors, which is of course more than your experience.

Time Consuming:  If you hire a professional he will conduct the necessary research to gather important information according to your business and the time you save can be utilized in looking into other aspects of the business and gathering new ideas and information for your business.

Writing a business plan is hard work. Many people spend a year or more writing it. In early stages of making it, business plan software can be helpful but the hard part is taking it to the conclusion and making it more impressive. 

So the final choice is up to you. Go ahead and make a meaningful decision!!