Ask any business owner, and they’ll say that getting your books in order is just plain smart.
Whether you need to prepare for tax time, a financial review or you just need to clean up some problem areas, your books are important.
Here are 4 ways that cleaning up your books will help save you cash.
#1: Reduce your taxable income.
Cleaning up your books helps determine your estimated income for the past year, as well as an estimate on taxable income.
You don’t want to miss a write-off. But if you procrastinate on entering receipts (instead of doing it right after a purchase), it’s much more likely that you’ll make a mistake.
If your books are up-to-date before the end of the year, you have time to make financial decisions that could possibly lower your taxable income.
#2: Direct your resources to what’s working best.
Planning for next year only works if you have accurate data to extrapolate the projections.
With updated books, you’ll gain a better understanding of what brought in more money versus what caused your business to lose money.
You can analyze which sales methods were most effective, what expenses went outside of your budget, trends and more.
It makes good business sense to direct your efforts to what was the most successful in the past year.
If your books are clean, you’ll have that data at your fingertips.
#3: Take advantage of business opportunities.
Did you miss out on the PPP loans that were available during the pandemic recovery?
A lack of records would stop you from applying. Chances like that don’t come around often. PPP loans were a critical way to keep businesses afloat during an unprecedented business environment.
Or maybe you have a chance to make an investment or sale that would change your business trajectory.
You know what buyers and investors want to see? Accurate, up-to-date books. It shows that you take business practices seriously and that you’re a professional who prides themselves on a job done well.
#4: See the bigger picture.
Long-term planning either excites you or makes you yawn.
But having better information helps you make informed decisions quickly and accurately.
The impact of better long-term planning can far exceed the cost.
Making sure that you understand the basics of bookkeeping and accurately read financials is paramount to your success.
Whether you learn QuickBooks yourself, have an in-house person designated to accounting, or hire a firm to keep you up-to-date, the long-term effects for your business can keep you going long after your competition folds.
Organization is key to the success of any business, especially when it comes to finances.
Accurate records allow you to make educated decisions for your business and will save you money in the long run.
If you need help with a QuickBooks clean-up, give the experts at Morgan & Associates a call, or fill out the contact form below. We’ll fix you up and get you ready for a clean year of books next year.