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SUCCESSFUL BUSINESSES ARE BUILT ON SOUND BOOKKEEPING PRACTISES

Peter De Lange • April 16, 2020

SUCCESSFUL BUSINESSES ARE BUILT ON SOUND BOOKKEEPING PRACTICES

Making good judgments when one has complete data, facts, and knowledge is not leadership - it's bookkeeping

All too often businesses who are struggling have no or little idea on the numbers that make their businesses profitable or not. Financials are only completed several months later and even then the accuracy is somewhat questionable. They are then very surprised when their cash flow dries up and have no idea where it went wrong.

It is of utmost importance that you always have the important figures at hand if not in your head at all times. By this we mean the sales for the month or last month, the debtor’s days and the cash flow coming in whether that is from sales or from outstanding debtors. These figures should be on hand at all times as they will reveal the warning signs well in advance so the right decisions can be made.

Why bookkeeping is so important

• BUDGETING – It helps you budget for future expenses and revenues.

• TAX PREPERATION – This says it all. If your bookkeeping is up to date and correct it will make submitting financials to the receiver of revenue quick and painless.

• Organization – Being organized is a skill every business owner should have. Being able to provide information to banks and other relevant parties is crucial as it could lead to the stopping of funds. Bookkeeping is the organization of financial information

• ANALYSIS – Bookkeeping is a tool for analyzing your business performance and to see what is working and what is not and to make the necessary changes

• BETTER PLANNING AND DECISION MAKING – It allows us to plan for the future and possible new ventures and make informed decisions

• FINANCIAL MANAGEMENT – It allows you to take control of your business finances giving you a clear picture of how you spend the money and when money is coming in.

• PEACE OF MIND – This is very important and allows you a good night’s sleep as you are always in control and there are no surprises

• PROFIT OR LOSS – It allows you to see your income statement and thereby always understanding whether you are making a profit or a loss.

• AUDITING – If you required by law to be audited or even if an accountant just signs off it will cost you a lot less if your books are neat and in order and unnecessary hours are not spent trying to sort out chaos.

So in short a business cannot afford not to have an up to date bookkeeping system and if you yourself find that challenging there are many bookkeepers out there that will make your life a lot better.

Alternatively feel free to contact me for a free 1 hour financial assessment at peterdelange@actioncoach.com

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