Why Knowing And Understanding Your Business Finances Matters So Much For Your Company’s Growth

Knowing and understanding your business finances can make a huge difference to the evolution and progress of your company.

This is one of the most important lessons I’ve had the chance to learn during my period of running Archway Books, a chain of bookshops in England. Every day I used to spend a few minutes to cash up and add the totals to dedicated spreadsheets. This was a basic thing to do, so it was very easy for me to stick to it until it became a habit.

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Furthermore, doing this every day for a long time allowed me to track the sales generated by those bookshops. Also, I could compare this year’s figures with last year’s ones, in order to gain a better understanding of the evolution of my sales. Also, I was able to send all invoices in time and to chase late payments before shipping out new orders to those clients. All these helped me to improve the way I was running my business.

I’ve always loved working with numbers. This is why bookkeeping was never a problem for me. I understand, though, that not all people love this kind of activity. Many business owners hate to look at financial statements and reports. It is easy to see why they consider bookkeeping a low priority issue. If you’re like these people, you can outsource these tasks to specialist bookkeepers such as Bould Bookkeeping.

What Makes Bookkeeping So Important?

Running a successful business isn’t possible without accurate bookkeeping. Moreover, if you seek to expand your business in the long run, you’ll need to know your numbers, in order to decide upon the best way to proceed with this endeavour.

You can learn the basics of bookkeeping, there’s no doubt about it. All these concepts are simple enough to understand, even if you don’t have any accounting training or background. Nevertheless, this will take quite a lot of time, which you may or many not have available. The alternative route is to outsource these tasks to experts.

When thinking to outsource your business bookkeeping, you need to choose a solution that adds value to your busienss rather than going for the cheapest supplier that comes your way. Having an experienced professional dealing with your finances will allow you to use your time to increase customer satisfaction or to improve your products or services.

Thanks to modern technology, many of the repetitive and boring tasks involved by bookkeeping are now automatic. Furthermore, you can now generate a wealth of reports and statistics that would allow you to develop more accurate business forecasts. You can use this data to gain a better understanding of the financial position of your company. This should allow you to seize the best opportunities for development, without endangering your cash flow situation. Make sure you learn how to read your profit and loss statements, how to assess the opportunity to expand your business, and how to keep your asset depreciation under control.

Don’t allow the sheer number of financial terms scare you. Understanding bookkeeping will allow you to prevent legal issues and penalties. It will also help you maintain a steady and healthy cash flow, thus enabling your business to operate smoothly.

Many business owners worry about their finances once a year, just before the tax season. Don’t be like those people! You should check your company finances way more often than once a year. Whether you do it yourself of you hire a specialist bookkeeping to do it, this simple exercise is the best thing you can do for the healthy growth of your company.