Why does bookkeeping matter?
To understand the importance of bookkeeping, think about your company’s stakeholders. Investors, creditors, suppliers and regulators need accurate financial records regarding your business. Proper bookkeeping can help you provide much of that data.
Bookkeeping can help you manage BAS compliance
Using bookkeeping, you can record your revenue and expenses and prepare BAS lodgements. If the data is incomplete or contains errors, you’ll have to amend the lodgements, which may result in interest and penalties.
Bookkeeping can help you make management decisions
Managers need accurate data to increase sales, manage costs and oversee the cash flow. Using basic bookkeeping principles, you can post and access information that managers need to make decisions.
Bookkeeping can help you finance your business
Eventually, your business may need to borrow money to operate. Your lender will require accurate financial statements to fund your loan. You can use accounting transactions to generate balance sheets, income statements and cash flow statements.
Your business may post dozens of accounting transactions each week. When you have a reliable system, you post fewer errors. And if you make a mistake, you’ll be able to correct it much faster.