Why Is Bookkeeping Important?

Facts over feelings. “Good fortune is what happens when opportunity meets planning.” For many small business owners, bookkeeping is a chore that they don't want to do. After a long day of putting out fires, going back and categorizing transactions and reconciling accounts is pretty low on the list of priorities. It may not seem that important, but as the business owner, you know what the cash inflows and outflows are.

Now, take a moment to ask yourself some questions. What is your monthly revenue? Is it increasing, decreasing, or staying the same? How are your margins? Are there certain products with better margins than others? How is your business trending month over month and year over year? Could you answer these questions easily, or did you need to check your records to see that your books aren't as up-to-date as you thought? If you're considering hiring your next employee or buying your first space instead of leasing, having the answers to these questions is vital for making informed decisions. The sign of a good leader is knowing not only what you know but also what you don't know.

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