Bookkeeping – the foundation of your financial information

For many business owners, bookkeeping is viewed as a simple task that can be completed quickly and easily. However, bookkeeping is the foundation of your financial information! Getting wrong can lead to total confusion, a complete lack of clarity and ultimately, financial chaos.

As business owners, we need to learn to respect financial administration and appreciate that the hard work put in will result in the highest quality performance information that is required to succeed.

We’ve learnt that using a cloud-based accounting system is one of the initial steps towards easier, automated bookkeeping. It’s as simple as clicking and uploading data… right? Unfortunately, it’s not that simple. If we’re inputting data that isn’t 100% accurate the output will be the same. Basically, garbage in, garbage out!

So what’s really involved in successful bookkeeping?

  1. All businesses require in-depth preformation information to gain financial clarity. With this, we can observe how a business is performing, along with what is and what is not working. To achieve this, inputting the highest quality data into an accounting system is required in order to get the same level of information out.
  2. It’s not only what data we enter in an accounting system that needs to be considered but HOW we are inputting it. With each different type of transaction, we may need to consider a different approach to ensure the right information can be extracted later.
  3. Accountants train for many years to become fully-qualified, and with years of experience, they are a business’s best asset. Business owners require someone who has excellent attention to detail and a shared value in high standards. With a qualified accountant as part of a team, they can help tidy up a financial mess and design a process that is perfectly suited to the unique requirements of a business.

To sum up, instead of viewing bookkeeping as a task that’s in the way of what needs to be done, we need to consider it as PART of what needs to done.

Great bookkeeping is an ongoing journey

If you’re ready to dedicate time to carefully consider your financial administration and responsibly delegate this vital aspect of your businesses core, that’s great! Bookkeeping is the foundation of your financial information. However, it’s important to remember that harnessing the power of the right information is not going to be an overnight transformation. Great bookkeeping is an ongoing journey, producing high-quality performance data that is well worth waiting for.

Learn about the foundations of financial information and much more in my book The Keys To The Safe. Download it for FREE here.

Next time… I’m going to be discussing hygiene, and by that I mean compliance!

 

Written by:

Antony Holdsworth BSc (Hons) FCMA CGMA

Owner of

E.H. Taylors

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