5 Reasons Why Bookkeeping is Important for Your Business

You started the business because you were passionate about a product or service. You didn't start the business to do the not-so-fun part of bookkeeping and accounting. This is not to scare you, but failure to start on the right foot with proper bookkeeping procedures can spell disaster for businesses. According to CPA Australia, some businesses fail because of bad management of their finances, while others have poor or no accounting records. 

Accounting and bookkeeping not only helps with recording financial information. Both processes help remain compliant with the Australian Tax Office (ATO) & ASIC (the government regulator of corporates and businesses).

5 reasons why Bookkeeping is so Important for Small Australian Businesses:

Bookkeeping helps with Tax Preparation

GST applies to all small businesses across Australia. Bookkeeping services consider all calculations and reconciliation around input credit and GST charges to ensure that you file your GST correctly. A bookkeeper assists your accountant in GST preparation.

With proper bookkeeping in place, your quarterly GST filings are filed on a timely basis. It also ensures that your business does not get a penalty for late or improper filing.

Bookkeeping tracks business performance

Keeping track of business performance and the health of your business is equally essential as compliance. Bookkeeping gives you a clear understanding of businesses' profitability(is your business making money?)and financial position (what are your cash and debt balances?)

Bookkeeping helps in budgeting

Bookkeeping helps you plan your expenses and map them to the expected payments. The process enables you to identify the P & L concerning clients, products, and services in your businesses. This can help you optimally plan its resources and expenditure.

Bookkeeping helps to make correct business projections

Your forecasting abilities increase with bookkeeping. You know how much progress the business has made over time. This goes a long way in making it much easier to plan for the future of the business.

Bookkeeping gives you peace of mind

Keep your books up-to-date if you don't want the tension of incomplete books to give you sleepless nights. Smartly managed bookkeeping services provide peace of mind and take a lot off your plate.