Reasons Why You Need to Maintain Proper Accounting System for Your Business
This is a common question, why do I need to maintain an accounting system for my business? Some even say, if I just calculate my cash and my debtors count ok; I think I don’t need to maintain the double-entry accounting system! However, sorry to say, you must need to maintain accounts using double entry; here is why you need it.
1. Know the exact financial status
Poorly managed accounting can completely ruin your business, as your business grows, you must need to have a dependable system. If your transactions are limited to less than a dozen, you can sometime depend on your memory, but if it’s hundreds, you can’t! Your brain can’t keep track for all of your financial transitions and can’t give the analysis about your business health whenever it’s required.
For some time, you need some business figure and cash move in-out statistics to take business decisions. If you don’t maintain any accounting system, you will not be able to know how your money comes and goes, when it comes and outs. Most importantly, you need to know how fast the money is moving, where it’s only possible to know from the proper accounting system. Your unorganized accounting system can’t provide you such picture anyway.
2. Saving Your Time
Proper accounting can make the business automate; you can track the debtors are paying on time or not, if the invoices are sent or not. If you don’t automate it, you have to spend some extra time.
As a business owner, you have thousands of tasks to do other than maintaining accounts. If you just got stucked in the accounting system, when you do rest of the things?
3. No More Guesswork
Some people think they have to be from accounting background to keep a proper accounting system for business or have to dedicate the full day just to maintain it. But this is completely a wrong guess, if you have a proper tool, you can maintain the basic accounting with some few clicks.
Paying tax or calculating VAT or other accounts is just a few clicks away. Many accounting software, for example, Tally.ERP 9 simplifies the accounting system doing the step by step tax of bank reconciliation, automated balance sheet, financial report, tax report preparing and so many things. If you want to maintain budget for your business, you can even do that using the software!
4. You can share the workload
If you don’t manage accounts on a proper system, if can’t share the workload to others cause the system you are maintaining is not universal and not everyone knows it. When you maintain the accounts using a system, you can share the workload to someone else whenever you want.
Some accounting software is even having the option to work collaborately on the system. You can easily share the task to your team member and track if the work is done or not.
It’s Your Turn
How do you maintain accounting for your business? In proper ways or not? What do you think about it? Let us know! 🙂