Entrepreneurs who have recently opened their business, are often so busy trying to get their business off the ground, that if they had someone to do their Edmonton bookkeeping, they would have more time to spend on their business-building activities, but also have up-to-date financial statements. The reason why having up-to-date and organized financial statements is that that can help entrepreneurs make better business decisions, which can help them stay in business longer. Industry Canada says that 15% of businesses fail in their first year, 30% have failed by their second year, and 50% have failed by year five. By having up-to-date and organized financial statements, can help business owners make better financial decisions in their business, that can help them avoid the reasons why businesses in Canada fail.
One of the most important things that entrepreneurs can do, in order to get up-to-date financial statements that are accurate, is to stay organized. Even if there hiring Edmonton bookkeeping to look after their statements, entrepreneurs should ensure that there also staying organized. This means that not only do they need to have their receipts, but they should have them organized as well as with applicable notes detailing the reasons why they have made those purchases, which is extremely important if it is not obvious. For example, if an entrepreneur has a statement from Amazon, their bookkeeper is going to need to know what was purchased so that they can attribute it to the right account. Not only should entrepreneurs have organized receipts, but they also need to provide their bookkeeper with bank statements as well as credit card statements.
Another important factor in getting organized bookkeeping is to set aside time on a regular basis to speak to Edmonton bookkeeping. If they’re getting their financial statements every two weeks, they should be setting time aside those two weeks in order to speak to their bookkeeper. There may be questions they have about the statements, the bookkeeper might want to go over some anomalies to see if their errors and a business owner can ask any of the questions that they have so that they can use those statements to make great financial decisions.
When entrepreneurs are looking at the interim financial statements that they receive from their bookkeeper, the first thing they should notice about their income statement is that it is organized in numerically descending order. The reason why this is so important is that if the expenses are listed in numerically descending order, the most expensive items will be at the top of the list and the least expensive will be at the bottom. If an entrepreneur is using the statements in order to minimize expenses, they can know that by looking at the top half of the list will make the largest impact to their bottom line.
By having organized finances, and regular interim statements from their bookkeeper, entrepreneurs can ensure that they are getting up-to-date and as accurate as possible financial statements to help them make decisions to run their business that can help them avoid running out of money or be proactive in helping them make more money.
One of the most important things that brand-new entrepreneurs should know when they are starting their business is that by having organized Edmonton bookkeeping, they will be able to make better financial decisions in their business, that can help them either avoid running out of money in their business, or be proactive in making more money and avoiding reasons why many Canadian businesses fail.
A key to having accurate interim financial statements is to stay organized, and that means having regular touchpoints with their bookkeeper. Not only do they need to get organized receipts, bank statements and credit card statements, but they should also be writing notes about what each of the charges is, and having regular conversations with Edmonton bookkeeping. These regular conversations can help the bookkeeper avoid making errors on their financial statements, allows them to ask questions and find out if there is any information missing. An entrepreneur should consider this time important as well, so that they can ask anything that they might not understand about the reports and see if there is anything else they can provide their bookkeeper that would allow them to do their job easier.
Many business owners do not know how often they should have their bookkeeping done, and a great rule of them is if they are paying their employees every two weeks, they should get their interim financial statements every two weeks. That way, they can review their financial statements to know if they have enough money in their business to run payroll. Edmonton bookkeeping says that this is an extremely important habit to get into, especially as an entrepreneur grows and they want to understand their finances before they disperse any payments.
Another way that this is great, is if a business owner is to make any large financial decisions in their business, to review their financial statements before making that decision. For example, if an entrepreneur wants to purchase assets, if they review their financial statements first, and no if they have enough money to make that purchase, and if they do not, they can make a plan on when they should be able to make that purchase. Without consulting financial statements first, business owners might make purchases that they ultimately cannot afford.
By keeping organized receipts, bank statements and credit card statements, entrepreneurs can ensure that they are getting up-to-date interim financial statements from their bookkeeper. This will help them significantly in their business, especially when they are new. Since there is such a high failure rate for businesses in Canada, if entrepreneurs can avoid those reasons why many businesses fail, they can exponentially increase their chances of succeeding. By getting up-to-date bookkeeping done for their business, business owners can focus on the revenue-generating activities that they need to do in order to grow their business while ensuring that they have the tools of their disposal to make great financial decisions.