Why Do I Need to Keep Good Financial Records?

This is a question I’m frequently asked.  I haven’t yet met a business owner who likes doing financial admin. Without fail, it’s the one aspect of their business that results in eyes glazing over or shoulders dropping under the weight of anticipated paperwork.

It is often my experience that many clients leave their admin until their year-end Financial Accounts and Tax Returns are due.  It is for this very reason, that a journey of tiny baby steps becomes a major mountain to climb.

However, rather than looking on your admin as an annual headache, reconsider it instead as a manageable routine aspect of you working week. Set aside just one to two hours per week to process, account for and file your paperwork. This way you control your admin instead of it controlling you.

Not only are you organised, but now you:

  • Have transparency over your financial activity
  • Know without guessing, who owes you money
  • Know who you owe money to
  • Notice and address billing errors either to or from you in a timely fashion
  • Can manage your cash without second guessing yourself
  • Have your records “accountant ready” saving yourself billable hours
  • Can make informed financial business decisions in real time
  • Ensure you submit accurate Tax and VAT Returns, avoiding penalties and interest

You don’t need to spend heaps of money to be organised. Just few Euro on leaver-arch files (which you can claim as a Stationery Expense!) will set you up for best practices.

Neither do you need an expensive accounting system when a simple spreadsheet or two are sufficient to keep track of income and expenditure.

By avoiding what we refer to as the shoebox syndrome, as well as being on top of your financial admin , you  are also saving yourself a lot of money in billable hours and potential Revenue costs.

You will further benefit from having an accurate picture of both your current business operations and financial position.

Best Practice Solutions

 

For further information on maintaining proper financial records, contact Bps today.

We’re always happy to advice and support.