Accounting and bookkeeping are costs of doing business, whether you do it yourself or hire a professional. 

When you run any kind of business, small or large, you’re legally obliged to keep records of your business transactions. While it’s a chore for lots of us, there are so many benefits that it’s worth just getting on with it.

When you give your books the time they deserve, they’ll reward you in all kinds of ways.

The Function of Accounts

There are several aims and objectives for accounts, some of which include:

• Budgeting or Planning- forward planning is only really possible when you know where you stand with money. A business can be a cash hungry beast, demanding equipment and machinery along with people to run it. You need to be able to anticipate what the business will need if it’s to grow in the future, and your accounts can help you plan.

• Logging Transactions - this is a basic and primary role. Having a good set of records means you can find and review all your financial information.

• Making Decisions - lots of business decisions are taken with one eye on the bank account, not least of which is how much to charge for services or goods.

• Monitoring Performance - you need to know if the business is growing and if it’s not, be able to identify where the problem lies. Financial reports, drawn from your accounts, can help with troubleshooting potential areas for improvement.

Why Bother with Accounting?

One of the main reasons for business failure is weak financial management. It’s not the only reason, of course, but it’s one of the most common ones. Small businesses, especially those run by sole traders or start-ups with limited financial resources, are particularly vulnerable.

Keeping on top of your books, and learning about professional accounting if you really want to do it right, can help in many ways. However, you won’t be aware of the multitude of options that an accountant can help with.

Trusted financial advisors and accountants such as these cpa services nyc help individuals, businesses, and other organizations plan and reach their financial goals. Though there is a cost involved this pays off in the long run. There are always regulatory changes to keep up with that you as an individual do not have time to research. It is useful to look out for accountants which have a list of clients in your area and come with good recommendations.

These are just some of the services offered by most financial advisors.

• Cash flow – it’s crucial you don’t let bottlenecks or hold-ups slow you down. Accounting can warn you about up-coming big bills (such as taxes so you can budget), keep you informed about unpaid invoices, track your expenses and reveal the most lucrative or profitable areas of your business so you can put your focus on those.

• Costing Projects – cost accounting lets you know your fixed costs and which ones are variable so you can put an accurate price on your goods or services. It can save you from underbudgeting so jobs that should be profitable don’t end up losing you money.

• Accounting can help you avoid or detect fraud and theft.

• You’ll have a better relationship with your bank manager, especially if you reach the point where you need a loan. Banks have much more confidence in business owners who can demonstrate an understanding of finances and accounting.

• Take the headache out of tax returns – you’ll have all your numbers to hand and be in a much better position to get on with the form filling.

Should You Do Your Own Accounts?

There is lots of help around these days for people who want to manage their own accounts. Online subscription accounting services, for instance, hold your hand through recording the correct information, and some will even help with filing your tax return.

When you’re brand new to accounting, even the various roles in the profession can be a little confusing:

• Accountants – will analyse financial data and can advise on areas that need improvement. They’ll prepare financial statements and get your tax return ready for submission. You can rest assured you’re solidly on the right side of the accounting laws, and that you’ll correctly claim all the expenses you’re entitled to.

• Bookkeepers – will work with you through the year to keep your records up to date. They’ll pay your invoices and bills if you want them to, and make sure your books are ready for an accountant at the end of the financial year.

So, you might want to use a professional, or you might want to do it yourself. If you choose to keep your own books in the long term, consider taking an accounting course so you know what you’re doing. You’ll learn to compile and read a balance sheet and a financial report such as cash flow or income statements. It will all add up to give your business the best chance of success.

Plus, you’ll have a valuable skill that companies always need should you ever decide to return to the jobs market.

Disclosure: This is a collaborative post.