8 Reasons Why Bookkeeping is Extremely Important for your Business

Bookkeeping is essential and is an important part of any company’s operations. Whether you are a small business owner or mid-size company, profit oriented or non-profit, individually owned or franchise operation, start-up, growing or well established business, everybody needs good bookkeeper services. Main function of bookkeeping is to help you to maintain accurate and reliable financial records. Yet, many business owners find them behind in their bookkeeping or consider it as the next to last thing to worry about. If any business wants to increase chances of success, they need to ensure that the solid foundation of bookkeeping and accounting services they need are in place.

Here are eight reasons why bookkeeping is extremely important to your business.

First and foremost, it's essential for tax preparation. Without proper bookkeeping records, it will be impossible to prepare accurate and meaningful financial statements and file corporate tax returns. In addition, every business has multiple statutory obligations such as GST/HST returns, payroll remittances, and T4/T5 slips that also must be submitted on time to avoid interest and penalties.

At the end of the year, when some business owners are scrambling to file tax returns and other multiple statutory obligations on time, it can be very time consuming and expensive to complete a full year of bookkeeping just before the deadline. In addition it can be very stressful and especially for the business owners when their taxes become due and they do not know how much they owe the government. You will need to go through a vast amount of financial information such as bank and credit card statements, bills, sales receipts and invoices in a very short period of time. Incorrect tax returns based on messy bookkeeping will most definitely put pressure on the cash flow as there is a high risk that business will overpay its taxes. And in contrast, underpaying its tax obligation will result in interest and penalties. Filing sales taxes such as GST/HST and payroll deductions are also required for most businesses on the monthly and quarterly basis, and could not be done without timely bookkeeping. If there is not enough money to make a payment, as a business owner you must take appropriate actions and correct the situation. If you won't be doing the bookkeeping, the business will eventually run off course and you will not know until it's too late. And it is particularly important for the capital structure and cash flow. High payments for the debt can be disastrous for any business and bookkeeping is the only tool to track these issues.

Errors, missing information, delays in gathering financial documents will result in late filing, which typically comes with interest and penalties as an additional, but very avoidable cost. At Bookkeeping services Mississauga, we are passionate to provide the best bookkeeping services the money can buy. You will not have to worry about finding the financial information.

In addition to your corporate taxes, bookkeeping is extremely important for your personal taxes as well. As a business owner, a significantly large portion of your income comes from your business. And in order how much you have earned, you need to know how profitable your business is.

With Bookkeeping services Toronto you can have your bookkeeping ready for the tax season on time. Secondly, only with the proper and timely bookkeeping, you will be able to get up to date financials to effectively analyze your business operations. Just by simply watching your bank balance, you are getting only a small glimpse of the financial performance of your company.

The final product of the bookkeeping is the financial statements and corporate tax return. However, Interim financial statements are also prepared only when the bookkeeping is complete. The reports should be generated regularly and used for analysis. Without basic financial reports such as cash flow statements, balance sheet and profit and loss, you won't be able to address problems and spot opportunities available. Interim financial reports will give users of the financial statements a clear picture of the company's performance. You will be able to track your cash inflows and outflows and analyze your operations. It will provide you information about what lines of your business are working and not working and why.

In the long run, it will allow you to improve on its weaknesses and focus on the strengths of your company. If you perform the bookkeeping regularly, you will have all information available at your disposal that will effectively result in better decision-making. The successful use of financial records can also show you trends in your business, let you compare performance in different years, and help you prepare budgets and forecasts.

In addition, Bookkeeping services Toronto, proper bookkeeping will be able to provide an accurate paper trail and be able to tell you how money is or will be coming in and where they are going out and when.

In addition, interim financial reports will be able to determine your company’s break even point and help (again) you to manage cash flow. Unorganized cash flow based on poor bookkeeping practices is the burden that negatively affects decision making.

Timely bookkeeping will also ensure that all your records such as invoices, payments, deposits are up to date and organized.

Besides analysis, bookkeeping is extremely important in organizing your financial affairs. If it's done properly, you will be able to find information you need very quickly. Whether you need to review your aging accounts receivable and see who is overdue, estimate your cash outflow by revving your accounts payable, see how much cash you have in the bank or how much you owe in sales taxes. Just by re

viewing basic reports such as balance sheets or aging reports, you will be able to see all that.

Moreover, other interested parties such as tax authorities can always ask you to provide detailed records of certain accounts and supporting documentation. If your bookkeeping is not done, or done poorly, it will result in interest and penalties as at best. In the worst case, you can get a review or audit. And these two will be very stressful, hugely time-consuming and costly even though you have nothing to hide. And even businesses that have nothing to hide, don't want to open their books for any kind of scrutiny.

If the bookkeeping is a pain point for you, reach out to Bookkeeping services Mississauga and have a chat with us.

At Bookkeeping Services Vaughan we continue to explore why good bookkeeping is essential for a successful business.

Another important factor, It is a requirement under the law to maintain accurate and organized accounting and other financial documentation information. Depending on your business type, the format you keep your information, e-commerce companies, etc. Typically it includes financial statements, tax returns, ledgers, sales and purchase receipts. For the full list, visit Canada Government website.

As a business owner, you are required to keep those records. Benefits of good record keeping include and not limited to the following:

Identify sources of your income and whether you must change sales tax (GST/HST);

Tax savings - good records can help you to decide what expenses are deductible and the input tax credits (ITCs) you may be eligible to claim;

Organized and complete financial records are particularly useful if CRA ever audits your company’s income tax or sales (GST/HST) returns. If you won't be able to clearly show your company’s revenue and expenses, tax authorities will make some assumptions and assess you with the tax bill they think you should pay. Moreover, If the CRA sees that your books and records are disorganized or outdated, they will have even more motivation to impose additional interest and penalties (which are not tax deductible). Furthermore, regardless who is doing the bookkeeping for you, as a management you are ultimately responsible for recordkeeping and no one else. It is absolutely mandatory to have the detailed records of your operations and be able to produce it to the tax authorities. It includes not only the general ledger, but also all the bank and credit card statements, as well as bills from your vendors to support expense claims and sales invoices to your clients to ensure you reported all the sales and related sales taxes properly.

In addition, keeping your financial affairs up to date, will make it significantly easier to report to your investors, or get a loan from the financial institution. A lot of reasons to consider why would you ever need a loan. And having your bookkeeping up to date should not be a surprise as you will be asked to provide up-to-date financials in order to get that cash that you desperately need. Every now and then you will need money to finance a new venture, cash to expand operations, buy capital assets such as equipment or vehicles, or obtain a mortgage. Your company will be able to build a good credit history and to establish yourself as a serious business and not a “Mickey Mouse Operation” by having this information at your fingertips. And in contrary, by not providing this information in a time efficient manner whether you neglected your bookkeeping or were busy with something else, will definitely result in losing the opportunity to get the loan or attract deep-pocket investors.

To achieve this, consider visiting Bookkeeping services Toronto for the best bookkeeping services the money can buy. Great bookkeeping services we deliver, can really spel the difference between success and failure of your company and perhaps save thousands dollars of your hard earned cash.

Proper bookkeeping records will help you to free up your time and focus on strategic and tactical planning aspects of your business.

Bookkeeping records represent the financial past of your company. And if you want to plan for the future, you can not do it without analyzing your past financial performance and other qualitative historical information about your company. Moreover, it is extremely important to have a well organized and accurate bookkeeping record. Poor accounting information will result in poor decision making. And additionally, messy records can weigh heavily on your mind and instead of moving forward, it will be holding you back and keep awake at night. If you have detailed recording, you will better overview your financials and it is so much easier to plan and predict the future. If you are confident in your data, any operation issues will be solved much fuster, and some of them you will be able to avoid in the first place. Planning will be much easier if you do it without fear that you have errors in your data. And to avoid that, consider bookkeeping services Markham for your future accounting and bookkeeping needs.

Proper bookkeeping will make your strategic planning much smoother and more manageable. You will be able to use this information for the forecast of your operating, financing and investing activities as well as planning hiring needs for months ahead.

In addition to simply strategic planning of your company’s operation, bookkeeping will help you with the tax planning for the whole objective to minimize paying taxes.

Furthermore, you can actually analyze how much progress you have made towards achieving your objective. Just by looking back, and comparing with the current records, you can see changes and patterns, drawing comparisons with the previous business years. You will be learning right away what part of your business made profit according to your plan, and where cost were trimmed. And most importantly, you will know what went wrong and why just by looking at the numbers. With the condition that they are accurate and reliable.

In addition, to strategic purposes, bookkeeping is the only tool for proper forecasting and budgeting. With the adequately organized books and records, you will be able to plan the financial road map of your business through budgeting much more easily. You more confidently will be able to plan for your expenditures in the future, as well as be able to identify resources that can help to cover future costs. You will have a balance sheet and income statement at your disposal any time, and based on these records you can easily develop and plan based on historical data, modify it the way you want, and use it as a tool for further growth and development of your business.

In summary, proper bookkeeping records is a great tool to focus on further growth and development of your business. Also, it will help you to plan for the future based on the historical information that bookkeeping provides you. Get in touch with a competent bookkeeping services Toronto and will be able to give yourself your weekends back to spend with your family and friends.

Another important advantage of keeping the bookkeeping up to date is a piece of mind. As a business owner you have a lot to worry about. It includes and is not limited to increasing your revenue and profits, cutting costs, monitoring cash/bank accounts, hiring employees, compliance with government authorities, creating and implementing right objectives for the organization. In addition, whether you like it or not, outside factors and distractions such as family issues, political, social, environmental causes distract you from running the company. And now this - bookkeeping. And a lot of business owners do not pay particular attention to keeping their books up-to-date. But at the same time, if you consider bookkeeping un necessarily evil and headache and do not want to deal with this problem, it will not go away. Every Year you have to file a tax return for your company, and can not do it until bookkeeping is complete. And it's always in the background, like an annoying fly keeping you up at night.

But the truth is when your books are accurate and up-to-date, you can relax as you know that your company books are ready for anything. Not the CRA, financial institutions, investors will give you any more anxiety and mental suffering.

The main benefit of having bookkeeping up to date with Bookkeeping services Brampton is that you can simply pull a balance sheet and see how much you have in the bank, run accounts receivable reports and know who owes you and how much, review comparative income statements and analyze current year financial results prior.

As you know that your bookkeeping is handled, you will be able to spend more time with your family. You will be able to attend family events that you missed before and more time with friends. In addition, if you are not good with numbers, outsourcing with bookkeeping services Mississauga will ensure that your books are handled with care. You will be able to also spend time more efficiently and actually work on further growth and development of your business. And particularly important, having an independent party such as a professional bookkeeping, you will be able to talk with someone about your finances. Therefore, you will be able to keep your business and personal life separately as it should be. Working with a professional bookkeeper you will be able to receive business and financial advice when you need it to help to improve your operations both long and short term. You will have an additional set of eyes looking at your books, never be late on paying bills and taxes, and most importantly not late with filing your taxes.

Your whole operation will run as a well oiled machine, you yourself will become more disciplined and productive and streamline other operation processes along with bookkeeping. Stric internal controls will allow you to slip at night and not to worry that misappropriation of assets and fraud might occur in your company.

Good bookkeeping records prepared by Bookkeeping Services Toronto will always lead to good financial performance and operational management of your company and most importantly give you stability, reliability and assurance that your books will be completed properly and on time.

Bookkeeping is important for your company’s cash flow management.

Cash is a lifeblood of any business, big or small and cash flow management is one of the most important tasks to keep your business alive. Regardless how busy business owners are, they always have to stay focused on cash balance and payments from their customers, and to your suppliers. A lot of seemingly growing and profitable companies consistently failed because they were not careful enough with their cash flow management. No matter how your income statement looks, if you are not getting cash from operations as a main business activity, no investment or financing activities will help the company to remain afloat and avoid cash crises. Cash flow always goes over profits.

Bookkeeping services Scarborough would effectively record all your receivables and revenue, expenses and liabilities. Therefore, you will be able to track when your vendor bills and customer invoices are due and actually paid. And as a business, you need to ensure that you get paid in a timely fashion. And the sooner, the better. At the same time, you want to pay your vendor also in the way when you are able to take advantage of the discounts offered and avoid or minimize interest and penalties on late payments if you are short on cash.

But how actually bookkeeping is able to achieve it?

Bookkeeping actually helps you to keep track of all outstanding invoices and bills, due dates, and most importantly amount of payments. Having continuously reviewing your accounts receivable will allow you to develop payment terms for various clients, follow up with the clients and help to implement remedial measures. As a result, you could collect the payment faster than before. You also will know who is continuously late, and start charging them with interest, or encourage clients to pay earlier by offering discounts. Moreover, you will be able to drive your sales with promotions and incentives. By offering special discounts and deals, you will be able to promote and encourage early payments. It will benefit you significantly and you will be receiving the payments ahead of time.

For your own accounts payable, you will be able to know exactly where cash outflow is going. You do not want to pay earlier as you will deplete the cash needed for other daily operations.

By knowing your expenses, you will be able to cut them on time and you will be able to achieve the same result in a different way. If you have some payments coming out, especially such as loan or purchase of capital equipment, try to negotiate and delay as possible. Even if you pay a just a few weeks later, it can substantially impact cash flow in your bank.

It also helps you to generate a cash flow statement that, along with operating activities, would show you investing and financing cash inflows and outflows.

If your company’s earnings are

Providing clients with any necessarily financial reports is routine procedure at Bookkeeping services Toronto. Interim financial records are very useful to review operations and essential for financial planning in any small business.

In the last part of our discussion, we will focus another objective - keeping personal and business expenses separate. All business owners know that it is a bad idea to mix personal and business transactions in the company’s books. If this area is not handled properly, it will create unnecessary and time-consuming work, confusion and obviously higher costs for the bookkeeping and especially if you were ignoring them for a year or two.

First of all, it will be much harder to assess your business financial performance at a glance if you bill your personal expenses to your business account and vice-versa. Your accounting records should reflect financial performance of your business. For example you spend a lot of money on dining out and a lot of meals and entertainment expenses recorded through your corporate account. It would give anyone who reads your financial statements that you spend a lot of money on meeting with clients, and essentially growing your business. But if these meals are personal in nature, users of the financial statements will be getting an incorrect picture of what is going on in your company. Personal expenses could be anything-fuel purchases for your car, groceries recorded as an office and general expenses, duty free items recorded as gifts to clients, etc. Separating personal and business expenses will be a costly and time consuming task to perform. Bookkeepers will need to go through vast amounts of the financial data, and no one would want to spend additional time and money fixing something that is so obvious and especially if it can be avoided in the first place. The impact of having personal expenses typically leads to underestimation or overestimation business expenses, which in turn results in making poor financial decisions.

Secondly, keeping expenses separately, adds to a professional credibility to your operations. A lot of business owners tend to forget that cash in their corporate bank accounts is not actually there to spend. It belongs to the company. And buying personal items will result in overspending cash that is required to keep the business alive.

Furthermore, it will make a tax season much simpler. You don't have to go through the painful process of separating the expenses. And when the books are clean, it takes significantly less time and effort to prepare financial statements and corporate taxes.

And finally, keeping personal and business expenses separately will result in better protection of your assets. And a lot of small businesses fail, it will be unwise to commingle personal funds and corporate earnings as there is a very high risk of losing your savings.

And if you are struggling to separate your business and personal funds, and use your corporate bank account like a piggy bank for your needs, consider Bookkeeping services North York and to take advantage of accurate bookkeeping services we have to offer.

Hopefully this information was useful for you and gave you some useful tips, and at Bookkeeping Services Toronto we take all necessary steps to ensure that all the financial data in your books is recorded properly.

Why bookkeeping is important. The final cut.

Bookkeeping ensures that your company’s financial records are accurate and up-to-date. It helps you to keep an eye on your expenses, accurately account for the revenues, keep track of all your assets available for disposal and expansion, or know how much to pay for your liabilities when they become due. It also helps to budget and create a financial roadmap of your company’s finances. If you ever need to provide a complete set of records to the tax authorities, potential investors, or lenders, reliable bookkeeping is crucial. Relationships with any of these parties might come at risk and can result in high interest and penalties, stoppage of cash injection from investors, or not compliance with debt covenants. You will be able to provide interested parties financial information on time and show them how organized you are and provide them financial information they need.

Keeping your records organized, helps you to know what is happening in your business and why. Contact us today and ask yourself how Bookkeeping services Richmond Hill will benefit your business. The following summarizes in a short format why bookkeeping is important for any business:

● Essential element of tax preparation and fulfilling your tax obligations on time

● Easier to deal with tax agency’s reviews and audits

● Provides tup to date financials to effectively analyze your business operations

● Compliance with income tax and sales tax filing, payroll liabilities, health taxes

● Helps budgeting, financial planning and forecasting

● Snap-shot of your business and tracking revenue and expenses

● Organizing financial affairs of your company

● Requirement under the law to keep your books organized and up-to date

● Gives users of the financial statements information they need to make an informative investment decision and/or obtain financing for expansion

● Strategic and tactical planning aspects of your operations.

● Piece of mind to business owners about their financial security

● Cash-flow management

● Ensures that business is not missing business deductions

● Separation of the personal and business expenses

● Will give you time back needed for growth and development of your company

● Avoiding paying interest and penalties

To stay on top of your bookkeeping, you do not necessarily need to hire a full time employee. You can reach out to Bookkeeping services Mississauga for the best bookkeeping services the money can buy in Toronto and GTA.

In conclusion, accounting and bookkeeping can be a very complicated matter. Doing your books on time can save you time, money and a headache. We have different options for you available at Bookkeeping services Toronto. In addition we offer set-up and training services if you would prefer to learn how to do your own books. And if you decide to do so, make sure you complete them regularly and accurately. And the following bookkeeping tips will help you to succeed:

● Always stay on top of record keeping and documentation

● Fix errors right away. If you don't know how, just google it

● Analyze your operations by reviewing balance sheet, income statement and cash flow, and anticipate trends

● If bookkeeping will become a burden, get a professional firm to help you.