Do you have a budget? Can you account for your daily or monthly expenses? Do you know how much money has come into your business at the end of each month? Is your bookkeeping upto scratch?
Most people are in business to make a profit! In simple terms you want to bring more money in than you are spending each month, after all your expenses. And how you ascertain this will to some extent depend on how well you keep up with your bookkeeping.
One of the most important, least understood and appreciated aspects of any business, is its bookkeeping or accounting system. And, because very few people know much about the reasons for a bookkeeping system, most people are frightened by the thought of the work involved in setting up such a system, and the drudgery of daily maintenance.
1. You must know where your income and revenues are coming from and where your money is going in order to know if you are making a profit.
2. If you are losing money, bookkeeping will let you know how much and from what categories.
3. You need to know which clients or customers owe you money, which ones pay you on time and which ones pay late or not at all. This is very important when you need to decide whether a client must pay cash or whether you can extend a client credit.
4. If many of your customer pay bills late, you need to know how late so you can take action to collect from �problem� customers.
5. You need to know who has actually paid you so you don’t try to collect money twice. If you make a mistake and tell a good customer that he or she owes you money, that customer or client may get very angry and buy from someone else next time.
6. You need to know where you are spending money. If you are spending too much money in some areas, bookkeeping will help you decide which areas and then you can develop a plan to cut what you spend.
If you are not keeping your bookkeeping upto date, then consider employing or contracting a bookkeeper to do the job for you.
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