It may not be known to brand-new entrepreneurs how important keeping organized Edmonton bookkeeping in their business is. But it can mean the difference between growing their business or failing in business. Industry Canada says that half of all Canadian entrepreneurs fail by their fifty-year in business. When asked the reason why their business is failed, those entrepreneurs said 42% are not able to attract customers, 29% said they ran out of money and 23% said they could not find the right team. If entrepreneurs hired a great bookkeeper to keep track of their business finances, entrepreneurs would be better prepared to avoid running out of money in the business, which is caused so many other entrepreneurs before them to fail.
The reason why having updated financial information is so important is that any time an entrepreneur needs to make a decision in their business, using updated finances, can help an entrepreneur guide that decision. If they want to determine if their latest marketing efforts has been successful, they can use those interim financial statements to determine if it was or not. If it is, they can choose to do more of the same marketing, and if it is not they can make different efforts. Also, entrepreneurs can use the financial information from Edmonton bookkeeping to see if they have money in their business to pay their staff, pay themselves, or purchase assets. If they can afford to do any of those things and they do not realize it because they are not consulting their financial statements ahead of time, they may make a decision to make a purchase that has them either in financial difficulties or has them run out of money in their business. Ensuring every business decision that they make is backed by their financing information can significantly help business owners avoid problems but also grow their business.
In order to help entrepreneurs ensure that they have the most accurate interim financial statements, business owners need to learn early on in their business to be organized. Having organized financial information can make it easy on whoever is doing the Edmonton bookkeeping in the business. Business owners need to ensure that every single payment that they make in everything they buy in their business has an accompanying receipt. They do not necessarily have to give the receipts to Edmonton bookkeeping, but they do need to ensure that they have noted what those purchases before and why they made them. Business owners going to be able to see those purchases on the bank statement, but business owners need to keep those receipts for the Canada revenue agency in case they get audited. All entrepreneurs need to keep all receipts for seven years.
Not only do entrepreneurs need to have organized receipts, they also need to provide organized bank statements and credit card statements. An effort to ensure that this is kept simple as possible, business owners should have only one business bank account that they use for operating expenses and one credit card for business. Edmonton bookkeeping | how to keep organized books
If entrepreneurs do not understand the importance of Edmonton bookkeeping in their business, they may choose to try to save money by doing it themselves. The reason why this is so dangerous is that entrepreneurs are usually too busy building their business to be able to actually do every single thing themselves including the bookkeeping. They end up working more hours than they anticipate and have no time left over at the end of the day in order to work on this task. If they do not understand the importance, they may go several weeks or months without updating their books, which can end in financial disaster for their business.
The reason why business owners need to have up-to-date interim financial statements is that it can help them make financial decisions in their business. Any financial decision that they make, is made stronger and better by understanding the finances first. If Edmonton bookkeeping helps out entrepreneurs with their books, it can help entrepreneurs have up-to-date financial information on a regular basis. Entrepreneurs may argument say that they do not have enough money in order to pay for bookkeeping, but when so many entrepreneurs fail in business due to making poor financial decisions, business owners should ask themselves if they can afford to not have the service.
Not only should entrepreneurs have regular interim financial statements sent to them from Edmonton bookkeeping, entrepreneurs also need to ensure that they are making time on a regular basis to speak to those bookkeepers every time they get an interim financial statement. The reason for that is so that entrepreneurs can ask questions about the statements, question any anomalies that they see, to get clarification and to ask their bookkeeper what various reports mean. A solid understanding of the interim statements can help entrepreneurs make better financial decisions in their business.
Entrepreneurs should understand that if they do not to schedule this important conversation with Edmonton bookkeeping, it is likely to not happen. In speaking of scheduling, entrepreneurs also need to ensure that their scheduling the time that they need to send that financial information over to Edmonton bookkeeping. Things that are scheduled happen, and business owners need to ensure that are sending this information along, so that they can get the most accurate financial information for their business.
Once entrepreneurs have accurate and up-to-date financial information, they need to learn how to read those statements. First an entrepreneur needs to get into the habit of looking at the balance sheet first for the income statement because there able to see more accurately any mistakes on the balance sheet than the income statement. Once they learn how to read this interim financial statement, business owners will be better armed for making informed financial decisions that can help them not only avoid financial problems in their business, but actively increase and grow their business based on the information in those reports.