Book keeping is a process involving recording financial transactions such as purchases, sales, and payments; it forms an important part of accounting. Well, some people take it so lightly, though, in reality, it is a rather crucial of every business.
There is a myth that most accountants find it easier to deal without recording. They claim that it helps to know about how the company stands and could prove handy in tax evasion. This, however, is not the case. There are a tonne of benefits of book keeping which could stand as the fulcrum of a company’s collapse or boom.
It is easy to attract investors just by showing a firm’s financial status. Professionals, for instance, is one of the businesses that have seen the fruits of keeping records. It is among Australia’s top20 companies. Charts and graphs representing data, are all acquired in their books of accounts, which are also mostly made public. It goes a long way in contributing to investment capital.
Business planning is made easier. All businesses need to be on point in their sense of direction and the path they take in deals. Financial records generate balance sheets and profit and loss accounts. These are used to check whether a corporation is on the right track financially. Planning is then much easier from this point forward.
Record keeping is now a requirement by law. All companies are needed to have proper books showing all transactions. These records are used in the auditing process which is vital. Furthermore, in case there’s need to investigate a crime, such as funds embezzlement, the books come in handy. It is, therefore, wise for businesses to keep books.
Book keeping is an efficient method of financial management. The finance of a company is one of its most important sectors; this is because it handles the flow of cash. Regardless of the system’s organisation and beliefs, money has to be managed efficiently and in due time. Book keeping aims to systemize the process, maintaining purchases and invoices and receipts. It also keeps them up-to-date making it easier for follow-ups. This helps the business to be on time with their payments.
Taxing is an essential requirement to the operations of the government which companies must adhere to. Tax evasion is termed illegal and thus, companies ought to pay up. To avoid the build-up of debts which may turn fatal for the business, they strive to pay adequately and on time. To help in tax calculations, the books are required. They keep track on information about taxes and piles up the bills. This, therefore, eases the company’s work during the fiscal or tax payment period; with an organised profit and loss account and balance sheet, tax returns are also considered.
The bookkeeping Sydney service proves to be essential in day to day running of businesses. Entrepreneurs should, therefore, make it a practice to keep their books updated and kept honestly as it could be the determinant of either life or death of the company’s life. No myths withstanding, therefore, there is nothing to lose with having a financial book; only much to gain!