- July 31, 2016
- Posted by: Fola Daniel Adelesi
- Category: Business, Productivity
An important step in the right direction for any startup company is to get started with book keeping. Now that scares a lot of people as soon as they hear it. There are people out there who do not like figures. Once they see figures, they become confused or even frustrated. However, to build a successful business, you cannot do without the books.
Maybe entrepreneurs should be enlightened to see that keeping books, for those who have started doing it, is not about being annoyingly detailed or showing some accounting skills. The books will become the life of the business and the future of the business depend on the books.
Why is the book keeping so important for businesses? The books will show some of the following:
1. How money comes in and out of the business
2. What the business is spending money on
3. The books will show the turn over period
4. In comparing present and past records, the books will show where progress has been made.
5. Sometimes, only the books can show what’s holding the capital of the business
6. With the records, informed decisions can be made regarding what to go for and what to stay away from.
7. It is the books that show investors the capacity of the business, not a few colourful power point presentation.
Some business owners get the impression that people are going to see what they are doing and because of that, they do not want to keep records for anyone to see. Sadly, the business owners usually need the records unexpectedly and that leaves them with very little option.
There is no way a business can even talk about growth if there has been no record to show where the business started from, what it grew into and what it is doing at the moment. So the importance of book keeping to any business cannot be over emphasized.
While the business may be small and the owner may not be good at keeping books, it is important to consider how to hire someone who can do the book keeping. That’s why some people jokingly say entrepreneurs should keep accountants and lawyers as friends. So with legal matters and accounting, startups can get professional services at almost next to nothing. This is not to discourage startups from paying for professional services, even though the idea works. This will just be one of the ways new businesses can keep their costs low until they can afford professional services and pay to get the best.
A few other reasons new businesses should have records will include:
1. The business may soon be asking for a loan and the records will count.
2. When some startups find investors or prospective partners, the record becomes an issue
3. Businesses are sold and an entrepreneur may decide to sell off. A good reason, among others, buyers will want any business is the records of the business.
Every business owner who is not good with keeping records and cannot afford the services of book keepers or accountants still has some options. The internet has tons of templates that can be used just to ensure that the record of the business is intact. Another option is for the business owner to get a template from accountants so that they are working with something that’s easy to understand and use. A few other startups can adopt the idea of just having a notebook where everything is written down in no particular order. When the accountants visit, they will then transfer all the figures into the proper books.
Entrepreneurs should bear in mind that lack of records is one of the things killing many businesses. While some people consider book keeping as something strenuous, it will be a disaster to lose an entire fortune belonging to investors or the business owner just because you don’t want to be stressed by book keeping.