Keeping proper bookkeeping records is very important for any business whether it is small business, home business or online business. Below I shall discuss the importance of keeping proper business records and the main reason for doing so. Besides, I shall also recommend a simple way of keeping your records and how to select a reliable bookkeeping service provider if you intend to outsource your bookkeeping.
Firstly, why keeping business records, you may ask. Well, the main reason of maintaining proper business records are as follow:-
1) Tax purpose
If you do not maintain a proper set of business records, it means you may not be able to report your tax accurately and timely. This may cause you unnecessary penalty by the tax authority. Furthermore, you do not want to pay extra tax unnecessarily, don’t you? The fine for late submission of your tax return could be avoided if you start maintaining your books in a proper manner right from the beginning of your business.
2) Financing Facility
The banks or financial institutions would want a set of your financial statements before they could consider your application for financing facilities. Usually the basic financial statements for home business consists of a statement of income and expenditures and probably a summary of the business’s cash flow position. Without financial statements, the
So, now you know the importance of keeping proper records for your business, but I don’t know how do it? You may say. In fact it is not difficult to maintain basic
But bookkeeping may not be your cup of tea and you would want to consider hiring somebody to do it for you. Fine, there are a lot of quality online bookkeeping service providers out there, just go and look for one and the fee could be quite reasonable. So how to choose a reliable bookkeeping service provider? Firstly, ask for the qualification and experience of the service provider. A competent bookkeeper should have at least 5 years of similar experience in a bookkeeping practice and be a member of the bookkeepers association. Besides, you should ask for their existing customers’ testimonial in order to judge whether their services are up to your mark.
In a nutshell, maintaining proper business records is as important as getting business, so make sure you start taking action to maintain it right at the beginning of your business.