Bookkeeping and Accounting is important for helping you maintain accurate financial records. Yet still, many businesses fail to implement this integral process. Besides the fact you are required under law to maintain accurate books and records, doing so will save you frustration later on.
In fact, “poor accounting” is one of the top reasons businesses fail. Without bookkeeping or accounting, you are blindly driving your business.
If you’re still unsure about the necessity of a dedicated bookkeeper, here are several significant reasons for maintaining a separate checkbook and set of books for each of your businesses that will boost your business.
1. For fulfilling tax obligations
Bookkeeping ensures that all important financial documents, incomings and outgoings are thoroughly recorded in order to pay corporate tax. Without appropriate bookkeeping throughout the financial year, it can be incredibly difficult to file an accurate tax return. Incorrect returns could mean the business overpays, which could put pressure on their cash flow, or underpays, which could result in extra demands for payments with interest. Furthermore, VAT-registered businesses have to submit a VAT return every few months detailing VAT charged and paid; accounting outsourcing companies in Thane are essential to keep you up with these requirements.
2. For fulfilling legal obligations
It’s not enough for businesses to simply submit tax returns and VAT returns; they must also maintain business records in order that HMRC can audit their finances at any point they wish. This is to ensure that the business is paying adequate tax, wages and National Insurance contributions. accounting outsourcing services in Thane can help you to ensure all these records are kept up to date, with every important transaction appropriately recorded to prevent any discrepancies with previously submitted tax returns.
3. For better analysis and management of business finances
Bookkeeping isn’t just about maintaining financial records; it’s about analysing them too. Every business needs to maintain a healthy cash flow in order to continue to pay staff and suppliers. Failing to do so could prevent the business from functioning as normal, which could lead to lost business and, in extreme cases, liquidation of the company. A bookkeeper like accounting outsourcing services in Thane can continuously analyse the business finances to ensure that cash flow is healthy and the business can remain strong.
4. To help plan business strategies
Good bookkeepers like accounting outsourcing services in Mumbai Analysis of business finances will help to guide the overall business strategy, giving sage advice to business owners. Plans to expand, invest and budget will all be influenced by the existing financial records, and as a bookkeeper you may be asked for recommendations on a regular basis. Business planning simply cannot be done successfully without looking over financial records, so bookkeeping is an important part of business expansion.
5. Reporting to investors
Many businesses rely heavily on investors to help their business grow and become successful, but these investors need to know that their money is in the right place. Thorough bookkeeping ensures that investors can access detailed reports about the company’s financial status in order that they can feel confident in their investment. Furthermore, when approaching potential new investors the business will be expected to provide financial data in order to demonstrate that it is in good standing; as such, good bookkeeping like accounting outsourcing companies in mumbai can help to secure new investors.
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