5 Reasons to Play Bookkeeping Catch-Up in 2023
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Bookkeeping isn’t the reason you opened a business, but it’s a critical task for your business. Of course, you can only stay afloat with proper cash flow, but bookkeeping can take time and energy away from other tasks your business requires.
Despite the time and attention to detail it takes, you mustn’t wait to play bookkeeping catch-up. Here’s why.
It’s Easier to Get a Business Loan
If you want a business loan, you must prove your business is viable. With up-to-date financial paperwork, you’ll have a much higher chance of approval because you can clearly show your finances, ability to repay the loan, and need for the loan’s funds.
Without up-to-date paperwork, your chances of getting approved are slim because you have nothing to show the lender.
Catch Errors Immediately
Errors happen, we’re all human, but if you have too many errors or let them go undetected, they can wreak havoc on your finances. Whether you under or overestimate your finances, it can have detrimental effects when paying bills, making financial decisions, or managing your cash flow. So always reconcile your bank accounts and credit card statements to ensure all your numbers make sense.
Reduce the Risk of an Audit
Cramming your bookkeeping in at the last minute can make you rush and make unnecessary mistakes. Furthermore, you could be audited if you make critical mistakes, which is not fun!
Even if you don’t make mistakes, but you don’t file your pay your taxes on time, you increase your risk of an audit and more headaches.
Keep up With your Accounts Receivable and Payable
You must know your accounts receivable and payables to make sound financial decisions. First, not paying your bills on time could damage your credit and ruin your relationship with vendors. Second, overlooking your accounts receivable means your cash flow is lower than expected.
You Can Focus on Growing your Business
Finally, keeping up with your bookkeeping lets you focus on your growth goals. You’ll spend fewer hours reviewing your books, looking for mistakes, and trying to make up for lost time. Instead, you can expand your business, target more customers, and grow your bottom line.
I know bookkeeping is the last thing you want to do, but keeping up with it will save you time and money. Of course, if bookkeeping isn’t your cup of tea and it causes you more stress than not doing it, consider outsourcing your bookkeeping to professionals. Let us handle your bookkeeping for you, allowing you to focus on your business.