Bookkeeping Systems: 10 ways it can be crucial to the success of your clients – REFs

Bookkeeping is the recording of a business’ daily transactions.  It is one of the few services that every company needs. Bookkeepers issue invoices to customers, record and monitor accounts receivable, verify invoices from suppliers, process payroll, create basic financial reports, and complete other important tasks to keep a business running smoothly.

If you know, or suspect that your client’s bookkeeping system needs help (and is holding back their success), this article should help to identify what should be done.

10 ways bookkeeping should help a business:

MyCFO helps our clients in critical ways to improve their bookkeeping.  We design and implement day-to-day bookkeeping procedures, then provide continuous oversight and training.  Our goal is to reform our clients’ bookkeeping system to help with their accounting processes and overall management.  Here are 10 ways that bookkeeping should be helping a business:

1. Gives extra peace of mind: When the books are complete and tidy, they won’t keep management up at night. They can rest easy knowing that the business’ financial information is ready to be reviewed when needed.
2. Aids with organization: Easy access to well-maintained records makes decision-making less stressful and requires less time.
3. Spotting financial trends: Through staying on top of the books and keeping regular financial records, management can identify trends and make adjustments.
4. Provide critical data for strategy: In order to plan for the future, a good understanding of the past is needed.  Management can track the results with bookkeeping and adjust goals accordingly.
5. Shows key data for cash flow management: Outstanding accounts payable, as well as lagging accounts receivable, can be identified with a quality system. It’s this delicate balance of cash inflow and outflow that will keep a business going.
6. Helps in accurate budget preparation: When income and expenses are properly organized, it’s easier to review financial resources and expenses.
7. Makes tax preparation simpler: Instead of scrambling for receipts or invoices, all financial information is organized; a key side benefit is tax preparation costs will likely be less.
8. Dissemination of data to outside parties: Whether customers, investors, lenders, or even the IRS, being able to provide the information requested by these parties is vital.
9. Avoid late fees: By paying vendor invoices in a timely manner, a company can avoid late fees and keep good vendor relations.
10. Complying with loan agreements: If a line of credit is in place, it likely includes conditions involving certain financial ratios, such as current ratio and debt-to-income. Instead of just hoping these will work out, an effective bookkeeping system can help in making sure the business is in compliance.

If your client’s bookkeeping system isn’t doing all 10 of the above, it needs help!

Every year, the professionals at MyCFO work with businesses of all sizes, and in a variety of industries, to drastically improve their bookkeeping systems.  Contact us today for a free initial consultation!