Too often yet the ignorance of entrepreneurs on the conduct of good financial records has led them to bankruptcy. The evolution of sales, debt management, level of spending are crucial information than only good financials records can provide for accurate data’s to monitor the progress of your business. Whether you are a small business, medium size- business or a non-profit organization, the good keeping of your financialrecordsmust be made at the beginning of your business and throughout your period of activity to avoid many problems.
Why it is so important?
A good financial record allows you to determine your company’s profile
Through the collect of documents such as receipts, invoices, bills and checks, cash book and every other important financial register you can determine your profits and your losses and determine your net cash.
It provides you information to make decisions
the collected information will allow you to anticipate market fluctuations and compare your results with those of your industry
Helps you Identify the source of income
Distinguish the goods of your range which are selling best or who have difficulty took off to adjust your business strategy.
It permits you to build your budget
Establish spending simulation and cash flow requirements are important aspects to lead your business. This document may be required by your banker and by any investors.
It helps you to obtains funding from financial institutions
Banks often demands your financial statements, records projects and accounting procedures in order to check the state of your financial documents.
It permits you to gains the confidence of the stakeholders in your business
You must be able to prove that your business is reliable and durable in many situations. When you are sign contracts with suppliers or even with creditors or from interviews with business angel’s investors.
It helps you to establish the Financial Statements and the current business tax return
In addition to considerable time savings for the constitution of your tax, good financial records will allow you to escape the payment’s penalties and other delays.
It allows you complying with federal and state payroll tax rules
When the time came for the quarterly taxes payroll’s declarations and that of the deliverance of the Form W-2, in the jungle of regulations and rules you have to give accurate data’s that only a good financial record’s keeping can provide.
It permits you to calculate the repartition of profits
The dividends of your shareholders will be determined through reports of profits that you bring from your financials records.
It reduces your accountant bills:
Obviously your accountant will prepare bills even higher if there many corrections to be made. And in the worst case he will not be able to avoid late payments, penalties and surcharges concerning taxes.
Now you know that keeping your financial records to the top is a subject who needs your full attention. We will be agreeing that the performance and financial health of a business pass by this essential step.