Back to blog

Why is Good Bookkeeping Essential for your Business?

Bookkeeping is the daily recording of financial transactions so you can tell how much income your business made, how much you spent, and how much was left over.  The purpose of bookkeeping is to give you an accurate set of books, so you know how your business is performing.  Bookkeeping is one of the things that often gives business owners a lot of heartburn and many view bookkeeping as a necessary evil.  You likely started the business because of a passion you have, because you wanted the financial freedom that comes with owning your own business, or maybe it was a combination of both factors.  Bookkeeping became a necessary function of your business as you grew but one you would probably choose to skip if you could.  It doesn't have to be difficult though and you can learn to love how your accounting helps you monitor your business' performance.  There are so many resources and tools that are available to businesses these days and it is easy to set up a business' books in an accounting software like Xero or QuickBooks.  In addition to that, there are countless tools available for every industry to help streamline accounting processes, reduce the time involved in bookkeeping, and save your business money. 

An accurate set of books adds tremendous value to your business since you are able to analyze your numbers, view profitability measures, monitor important financial ratios, and identify trends in your business' finances, sales, and operations.  You will feel more in control of your business because you will understand what has happened in the past and you will know what to change going forward so it is clear that you are profitable.  A good set of books brings peace of mind and takes the guessing away from your business' finances.  It's worth getting it right because it is one of the keys to a successful business.