Most people have no idea what is involved in bookkeeping and accounting, not even business owners.  Many small business owners are especially guilty of this.  They are overworked and understaffed as it is and for them to understand bookkeeping is just too much.  Based on my experience (over 10 years in the public accounting world), people don’t understand bookkeeping and don’t place much value on it.  I’m here to convince you that bookkeeping is important to your business, very important.

A lot of business owners look at the bookkeeping function as an expense and nothing more.  They only do it because it’s necessary.  Maybe they have a loan with a bank and the bank wants to see regularly scheduled financial statements, or there is a silent partner or investor that wants to make sure everything is on the up-and-up in the business.  At the very least, proper bookkeeping is required for the year-end tax return.

But a good bookkeeper can provide value to the small business owner or manager.  They can provide reports that help analyze the business in many different ways.  Who are your most valuable customers?  Which jobs made money and which ones lost money?  Who is the most profitable sales rep?  Which location was the most profitable?  A well maintained accounting system will be able to answer all of these questions and more.  Many of the business owners that I’ve worked with don’t even make use of this information and it’s such a waste of good information.  It’s a cliché but they are working so hard IN their business that they don’t work ON their business at all.  If they would just take 15 minutes a day and study the accounting reports, they would most likely see trends or some piece of information that would make a big difference in their business.

In conclusion, bookkeeping matters because it’s the only way to tell how your business is doing.  If business is a game, then bookkeeping and accounting provide the scorecard.  It’s how you tell if you’re winning or losing.  So don’t look down at the accounting department as an expense that doesn’t provide any value, look at it as a source of invaluable information.  Use it to the fullest extent possible and watch your business improve dramatically.

If you want to learn more about bookkeeping and accounting, visit the Bookkeeping Services Guide website.