Do you need to know about learning the services that you will require to run your business smoothly, being a startup?
To simplify your business, do you need to invest from your startup business to get the services of a bookkeeper for your business?
As the start-ups don’t have a strong background at the beginning stage of operations, bookkeeping becomes crucial part for them. Bookkeeping is the process to record financial transactions of a business on regular basis that involves purchase, receipts, sales, etc. Basically, it is means of entering the data into the accounting system. That is why; accurate and complete bookkeeping is a main source of information for any organization that includes start-ups.
It is considered many a times that in the initial stage, start-ups don’t consider Bookkeeping services as a significant part, therefore in order to avoid extra cost they ignore the concept of bookkeeping.
Below are some reasons that why bookkeeping is crucial for start-ups:
GET YOUR ACCOUNTS ORGANISED
To track income and expenses, organised records of financial transactions undertaken by startups plays a crucial role that can be achieved by bookkeeping only.
GET PREPARATION OF FINANCIAL RESULTS ON TIME
Preparation of financial statements such as Profit and Loss account, Cash Flow, Balance Sheet and Fund Flow Statement is a tedious task, but with bookkeeping it becomes easiest to do so.
ENHANCED OVERVIEW OF BUSINESS
Bookkeeping gives an overview of the business in a timely manner, thus assist you to analyse the current situation of the business.
Also Read: How to Write a Business Plan to Start a business
FUTURE BUDGET PLANNING
Bookkeeping is all about preparation of organised accounts that assists the start-ups to plan the future budget. The financial transactions become transparent, when the accounts are maintained for every period. All the spending and earnings become clear, this way start-ups can prepare the action plan for spending money wisely.
BETTER DECISION MAKING AND ANALYSIS
To analyze the financial data such as income, profit margin, expenses, taxes, vendor details and purchase, etc., the start-ups opt for bookkeeping services. By analyzing this data, the start-ups make decisions which turn out to be profitable for them. If they know their financial position, they may respond quickly according to the market demands.
GROWTH TRACKING
For start-ups, it is very important to keep the track of growth, since they stand in the initial stage of operations and they invest substantial amount of money and time. Therefore, bookkeeping give them detail in terms of profit and growth. If you analyze the growth by tracking financial records that are provided by efficient bookkeeping, the business can grow at higher pace.
FINANCIAL MANAGEMENT
There are certain questions to be asked in the business such as where the organization spends money? To whom they pay outstanding dues, outstanding payments, etc.? This way it assists start-ups to handle their finances efficiently.
TAX PLANNING
All organizations are required to pay the taxes in the form of income tax and indirect taxes such as GST. They are required to file income tax returns and GST returns on the due dates. They require detailed and exact information on sales, profit and purchase for this. The start-ups get information from accounts maintained; this way the bookkeeping assists in computation of forms of taxes. The books of accounts shows detailed analysis of financial transactions that can be used for tax planning.
To keep the track of financial performance of the business, timely bookkeeping is the basic key. It gives the management an idea on performance of the organization and the management may take such decisions to take corrective actions. Therefore, the start-ups must not overlook the significance of bookkeeping, since it is a measure of business performance in terms of money.