Do you wonder how your business is doing this year, but you are behind in your bookkeeping?
Are you overwhelmed with organizing your business finances?
Here are 4 reasons why investing in good bookkeeping can provide you more peace and guidance.
1. Celebrating Your Wins
It is important to celebrate when you hit your goals. If you set revenue and profit goals earlier this year, how do you know if you are hitting these goals without current bookkeeping? How can you calculate accurate commission or bonus calculations without good bookkeeping? I had a client once who was estimating their profit and paying out commission based on this estimate. This is a dangerous thing to do because you could overpay the commission and bonus, and you aren’t getting that money back.
If you had a good year, celebrate hitting these goals with your team. I know some businesses that will not know how they did last year until September or October of the following year due to filing a tax return extension. At that time, nobody will want to celebrate. They will have long moved on.
2. Recognizing Your Challenges
What if your expenses and margins are lower than you think? You could be headed for a cash crunch, but you don’t even know it. It can be quite motivating to know if you are behind the plan. A few years ago, I was Controller for a company that was $500,000 behind the plan. We communicated this to our team and we all did our part to catch up. In fact, we came up with innovative ways to upsell and improve services. We ended up shattering the goal. We also were in position for excellent growth the following year.
How could we do this if we didn’t know where we stood financially? Current bookkeeping gives you more flexibility to assess where you are today and adjust.
3. Setting Updated Goals
How can you set goals without knowing where you stand today? The best financial goals are based on historical results or some kind of actionable plan for success. For example, if you want to double your revenue, what are you doubling? Is this even possible? What do you need to do differently to reach this destination? What people, processes, or profits are needed to meet your goals this year.
4. More Peace
If you are disorganized and months behind on your finances, you might be dreading the end of the year and January. Could you be doing better or worse than you are thinking? You might owe a large tax bill or get a credit, but you don’t know. The suspense of not knowing can be stressful. You don’t know how to make decisions on hiring or investing in your business.
What if you had your bookkeeping up-to-date? You could have your tax liability estimated. The knowledge of your profit and cash flow can help you make better decisions. Would this give you more peace?
If you desire clean, current, accurate books, reach out to us at Bender CFO Services. I have a team of bookkeepers who can straighten this out. Contact me at email@example.com or 682.593.9101.