The Important Role of Bookkeeping in Business
We all have our own systems for keeping on top of our business bookkeeping. Some of us are super organised, using filing systems and intuitive cloud software like Xero, whereas others simply hope for the best.
Like it or loathe it though, bookkeeping is essential. All businesses need to keep track of their income and expenses and if you don’t keep on top of your cash flow then sooner or later things will get tricky.
In order for your business to be successful, you need to be balancing the books every single month, otherwise, you might struggle with paying for things like stock, suppliers and even your taxes.
It’s a good habit you really want to be getting into from the very beginning of running your own business. Even if you have an accountant, they’ll still need you to keep on top of your bookkeeping such as getting your invoices out and recording your expenses, as they simply can’t do their job without knowing your income and outgoings.
Bookkeeping vs Accounting – what’s the difference?
Put simply, bookkeeping is accurately recording and organising all the financial transactions for your business, whereas accounting covers the regular reporting of the financial position of your business. At Vital Accounts, we have solutions for both simple bookkeeping and complete accountancy.
Financial reporting is a wide subject, driven by the size and complexity of a business. For most small businesses based in the Australia, it means analysing, categorising, interpreting, and reporting on financial data over a specified period of time.
Bookkeeping is focused on recording the money coming in to and out of your business, usually made up of all your sales or invoices, and everything your business spends money on (your expenses). Accounting means organising that information, helping you make decisions about your business to help it grow or become more efficient.
Leave it to the professionals
It’ll always be tempting to try and keep your operation down to as few heads as possible, so it’s understandable why so many self-employed tradies try to take care of everything by themselves. As most discover, though, keeping all the finances in check as your business grows is not just a real pain in the neck, it also gets in the way of your actual work.
At Vital we can offer more than basic bookkeeping and can work on projects that will improve the overall operation of your business, get in touch for a chat with James and Sheridan today.