How Good Accounting Helps Your Business Grow

You probably do a lot of your financial chores because you must. You send invoices to get paid. Pay bills because they’re debts. Keep track of your expenses for multiple reasons (to bill customers, plan for taxes, reimburse employees, etc.).

Do you realize, though, that the best accounting practices can lead to more than a good credit rating? You may think that you’re just doing what needs to be done, but you’re actually accomplishing more than that. The health of your business 12 months from now depends on the steps you take now to manage your money.

There are countless reasons why close attention to your numbers will pay off eventually. Meticulous accounting now can lead—in the long run—to:

More satisfied customers.

An incorrect invoice or statement not only reflects poorly on you, but it reduces the chances you’ll be paid on time. Complete, detailed descriptions of merchandise and/or services ordered and received will please the recipient, as will prominent placement of the total and date due (and an easy way to reach you with questions).

Better accounts receivable.

Good accounting screams for follow-up. When you don’t get paid on time, it’s important to let customers know that while they may have forgotten, you haven’t. Track not only invoice due dates, but dates when reminders must be sent for missing remittances. Consider finance charges on late payments and discounts for early payment to encourage promptness.

Smartly-stocked inventory.

If your company sells products and keeps stock on hand, you can do yourself a lot of good by maintaining to-the-minute inventory records. Knowing what’s selling and what’s not, how many of every item you have, and when to reorder will keep you from running out and, conversely, having to heavily discount slow-selling items to get rid of them. Accounting software can track this easily.

Fewer crises.

Keeping up with daily tasks is important, but so, too, is determining where you might be three or six months from now. Projecting your cash flow using your existing records isn’t easy to do on your own, but it’s critical information. Again, if you’re using an accounting application, you may be able to glean some insight from reports. This is an area where you may need the help of an accounting professional.

More informed planning.

Your plans for the future, of course, depend on funding. Your company can’t grow unless you know how much it will cost to reach your goals – and whether the money will be there when you need it. Good accounting practices can give you that information.

Financial knowledge is the key here. Sweating the details every day and using that data to make educated projections can keep you on a steady path to growth.  If you’re finding it difficult to do either or both, tell us what you’re trying to accomplish, and we’ll work with you to implement the accounting practices that will help you get there.