Why Accounting Is Important?
Business Accounting
As a business owner today, good accounting is even more important than ever. It can definitely become overwhelming in a hurry, especially if you didn’t take it seriously and aren’t well prepared. Even as a sole proprietor, you need a really good accounting procedure, or really good software like Quickbooks, but still, you must adapt some strict behaviors and practice them religiously. Unless, of course, you have an endless supply of money and don’t have to make any in your business. We’ll assume for the sake of this article that you are interested in making a profit, and in learning about why accounting is important. Your business is your livelihood, and you likely put everything into it.
Whether it makes money or not and how much it makes (or loses) directly affects the way you are able to live. With so many ways to grow your business and profit from the benefits out there in the market today, good accounting is critical to your success. After all, you will need resources for taking advantage of the new growth opportunities that are the most profitable. Like the old adage goes, it takes money to make money. So let’s talk about some of the ways in which you can see why accounting is important to your business.
A/P – A/R
First off, let’s talk about accounts payable and accounts receivable, or A/P – A/R. This is one of the basic principles in accounting, and absolutely vital to know at all times to keep from quickly bankrupting your company. Your business has overhead expenses and bills to pay every month, and these should be part of your accounts payable records. You absolutely need these records to be 100% accurate, first of all. Especially if you want to stay in business for more than a month (or so)! How much you pay out is what you measure against what you’re bringing in – your accounts receivable – in order to get your gross profit amount, something you’ll need for your taxes as well as any loans you may apply for, etc., plus, it is particularly important to know when deciding whether or not you can afford to buy something, and in making any financial decisions overall.
When people owe you, you may need to send reminders. But how do you remind yourself, when to do that, if you don’t keep good accounting records? You wouldn’t even know when they are late, and if not prompted, they might end up not paying you at all. Essentially, your business’s success depends on these records, and the financial planning and decisions you make based upon the information within them. Since most business owners know all this, let’s move on to some real information you can use.
Business Planning
OK, so let’s say you’ve started a business within the last 3 years, and you’re still struggling to show a profit every month. Or you’ve decided you’re going to start a business, and want to do it right. In either case, business planning is in order. The reason you want a business plan is to establish the future goals you want to achieve, and create your plans for getting there. It should include milestones leading up to your goals, and detailed plans and ideas on how you’re going to achieve each one. This helps you determine the precise business focus for each milestone. In addition, if you’re trying to secure funding for any reason, you will need to present a well researched business plan to any lender, bank or investor. This is also another area where you see why accounting is important, as you will need a detailed assessment of your company’s financial records and accounting, and a profit and loss statement. How to write these things, however, is a subject for another post. There is a lot of information that goes into writing these types of records and reports. Business financial planning can be achieved with the help of a good financial advisor in Fort Collins, Colorado Springs, Or Denver, which is definitely one of the best pieces of advice you can take from this post. As soon as your business begins pulling a steady profit, enlist the services of a financial manager or advisor. You can find a great resource for assistance with business financial decisions and growth opportunities with Boyd Group Services.
Business Investing & Financial Advice
Once your business has shown that it is profitable, one of the best things you can do from here is to hire a professional financial advisor and business growth specialist. A great advisor will be someone who gets to know you and your business, so that they understand your needs, goals and even your personality, very well. They will already have established important contacts necessary for growth opportunities and for current market trend information and inside (legal, of course) tips. They should have extensive knowledge and proven experience in their field of expertise. Most importantly, they will truly care about your business, and about helping you to succeed and reach your goals. If you have a great financial and business advisor by your side who really cares about you, you can do just about anything. This is not hype or an exaggeration. Ask just about any highly successful business owner the importance of having one, and they will all tell you the same thing. It is of key importance.
In Conclusion
Hopefully we have demonstrated various reasons for why accounting is important to your business, overall. The better job you do with your accounting records and financial planning, the better chances you have of growing and prospering in general. You will also have a much better chance of obtaining funds when you need them for growth opportunities and investing. There are many more digital marketing ideas you can take advantage of with a relatively small expense. Hiring a quality digital marketing firm is another excellent business decision that should pay off rather satisfactorily. In any case, good luck and stay focused on the future goals you set.
FIND US HERE
Chad Davidson
Boyd Group Services, LLC
Phone:
(970) 639-0829
Fax:
(970) 470-7798
2225 Stillwater Creek Drive,
Fort Collins, CO 80528
chad@boydgroupservices.com
www.boydgroupservices.com
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