The Importance of Bookkeeping and the Danger of Not Doing It

The Importance of Bookkeeping and the Danger of Not Doing It

Bookkeeping is a critical part of any business or nonprofit organization. In fact, it is often the difference between success and failure. However, it can also be very intimidating.

Especially if you run a startup or a small local nonprofit, it can be extremely tempting to try to avoid spending time or money developing good bookkeeping practices. Don’t fall into that trap!

No one understands the importance of bookkeeping like Good Steward Financial Company. We are a virtual bookkeeping service that specializes in 501(c)3 organizations and small businesses.

We provide a wide variety of services, from QuickBooks bookkeeping services to fractional CFO services, that keep your small business or nonprofit fiscally healthy.

At Good Steward Financial, we are dedicated to helping your organization thrive by taking the guesswork out of bookkeeping. So, let’s explore why bookkeeping is so important– and the consequences of not doing it…

Improve Cash Flow Management

One of the easiest ways to see bookkeeping’s day-to-day benefits is cash flow management.

Bookkeeping keeps track of all your business’ income and expenses, so you always know how much money you have on hand. Bookkeeping also provides a record for all invoices and the associated names, dates, etc. so that you stay current.

With bookkeeping, you can finally understand how much you spend per month on business supplies like pens and paper, as well as keeping track of whether this month’s revenue will be able to cover upcoming expenses.

Knowledge is power, and proper cash flow management gives you the ability to make important financial decisions with confidence. It also gives you records to review if you ever have a dispute with a vendor or customer.

Get Better Insights for Budgets, Investors, and Grant Applications

Bookkeeping isn’t just useful for short-term cash flow management; it’s also an invaluable tool for your business or organization’s future.

When your books are in order, you can see how your business has performed in the past and make more accurate projections and plans. You can use bookkeeping data to inform budgets, board presentations, and investor reports.

Bookkeeping shows you what worked and didn’t work in the past. This financial overview highlights both potential areas for growth as well as issues that require action.

Investors and grants will also want to see your financial records before choosing to work with you, so bookkeeping isn’t just a necessity for organizing your current assets but also for obtaining future capital.

Remain Compliant

As a small business or nonprofit owner, you are required to keep financial records. Then, you use those records to accurately declare your income and file taxes. Not doing so can result in legal repercussions.

If your books are in order, you won’t be scrambling for data come tax time, and you decrease your chances of making an error. Bookkeeping also helps you identify tax deductions.

Even if your taxes are fully compliant, your business or organization may still be audited by the IRS. In the event of an audit, orderly bookkeeping records make the process much simpler and faster.

Accurate bookkeeping is also a safeguard against internal fraud or embezzlement.

Working with a full-service virtual bookkeeping service like Good Steward Financial gives you extra security against any negative outcomes.

Virtual Bookkeeping Services with Good Steward Financial Company

Now that you know how important bookkeeping is, how should you tackle it?

You can try to handle it by yourself, but to save time and money, you will want to outsource to financial professionals like Good Steward Financial.

Even do-it-yourself options like QuickBooks bookkeeping services need professional setup and support to get the most out of the software from a virtual bookkeeping service like Good Steward Financial.

Contact us at 336-347-3851 or use our easy online form to find out how Good Steward Financial can help your small business or nonprofit organization grow.