The reason why accurate Edmonton bookkeeping services is so important to entrepreneurs, is because the more accurate and up-to-date the financial statements are in business, the better tools they are at helping entrepreneurs make financial decisions in their business. It is a well-known statistic from industry Canada that half of all Canadian businesses fail, and when asked why their business failed, 29% of those entrepreneurs give the reason of running out of money as a reason why their business was not successful. Therefore, if entrepreneurs are able to make better financial decisions in their business, they can help avoid running out of money in their business and increase their chances of succeeding.
When simple way that entrepreneurs can ensure that they have the most up-to-date financial statements possible, is by being organized with their receipts, bank statements and credit card statements. It should not take an entrepreneur very much time to keep these organized, as long as they come up with a system that they stick with. Then, by scheduling time in their calendar to send the information off to Edmonton bookkeeping services, they can ensure that they are allowing their bookkeeper to have the tools necessary to keep accurate books.
It is not just enough that business owners keep these things organized, but avoiding common errors from brand-new entrepreneurs, can further help their bookkeeper stay organized. For example, business owners should not to get into the habit of having more than one business bank account. There is no reason to have more than one, and having more than one will make a business owner have to pay more money than they should in bank fees. Also, business owners should also ensure that the only have one credit card. By having one bank account and one credit card, entrepreneurs are able to ensure that Edmonton bookkeeping services can quickly and easily go through all of the business finances in order to keep books accurately and quickly.
Another way that entrepreneurs can stay extremely organized financially, is to never get into the habit of using personal bank accounts for business expenses. This is extremely important because as entrepreneurs use their personal bank account, Edmonton bookkeeping services will have to go through that personal bank statements and try to figure out which expense was business and which was personal. If they make any mistakes, that can lead to incorrect financial statements.
Entrepreneurs often wonder if they need to keep every single one of their business receipts, and while Edmonton bookkeeping services do not necessarily need to see the receipts, as long as they are shown up in the bank statements are credit card statements, entrepreneurs need to understand that if they get audited by Canada revenue agency, they will need to provide those receipts, so it’s important they keep them. Business owners need to keep all financial information for seven years before they eliminate the risk of needing to provide them to CRA in case of an audit.
Entrepreneurs often start their business, thinking that they are going to be able to keep accurate Edmonton bookkeeping themselves, however once they have operated their business for a few months, they realize that they are spending far more time than they ever thought running their business, and the bookkeeping has fallen off. This is very dangerous because when entrepreneurs do not have up-to-date financial statements, they are unable to make informed business decisions. Instead, business owners should view hiring a great bookkeeper in their business as less of an expense of their business, and more of insurance that they will have the right financial information to make great business decisions. Since many entrepreneurs fail in business because they ran out of money, using financial statements in their business to avoid running out of money, is worth whatever a business owner can pay.
It is not just important for entrepreneurs to receive those interim financial statements from Edmonton bookkeeping service, but they also need to be able to understand them. For example, business owners who do not understand how to read their balance sheet, often use their income statement in order to make decisions which could actually end up in disaster. In order to learn how to read those financial statements in order to make decisions, business owners should put it into their calendar to have regular phone calls with Edmonton bookkeeping services in order to ask questions about the statements they receive. This way, they can get advice, ask for clarification or even what the reports mean. By having a phone call, business owners can ensure that the conversation is as short as it needs to be and very clear. Business owners think that they are going to be able to save time by having a text or an email conversation, that usually ends up taking far more time and be more confusing.
Once business owners have it in their calendar to regularly speak to their bookkeeper, and that their financial statements are being kept up to date, business owners should understand that they need to be receiving these financial statements every two weeks. Many bookkeepers believe that once a month is often enough, but if business owners are dispersing payments more often than once a month such as a payroll, which many entrepreneurs usually their staff every two weeks, then they should get into the habit of reviewing their balance sheet and their income statements before any payments are dispersed. The bookkeeping team that always bookkeeping firmly believes that biweekly interim statements can help entrepreneurs have the information that they need in order to run their business smoothly.
By ensuring that they have the right information to give to their bookkeeper, setting aside time to speak to them, and using the information before they make any financial decisions in their business, business owners can ensure that they are helping their business avoid one of the most common reasons for failure.