As entrepreneurs grow their new business, they often believe that they can save money by doing everything themselves, from the marketing to Edmonton bookkeeping. However, if entrepreneurs do not actually succeed in working on the books of their business on a regular basis, they can often end up with incorrect and out of date financial statements. The reason why this is not great for their business is if business owners do not get into the habit of reviewing their financial statements in their business, they could end up making poor business decisions. For example, if a business owner does not look at their balance sheet before they disperse payroll, they may not realize that they do not have enough money in their business to make that payment, and could end up bouncing payroll. Business owners also need to utilize those statements in order to keep track of their revenue, profits, and expenses, and if they see that their revenue is sliding, they can be proactive and engage in some revenue-generating activities or minimizing expenses in order to increase their profits.
Regardless of who ends up doing in their books, entrepreneurs need to understand that by staying organized, they can make keeping their books much simpler whether they do it is or they hire Edmonton bookkeeping. By keeping organized receipts and notes of what was purchased with those receipts, business owners can start keeping track of all of their expenses which is very important for their bookkeeper to have in order to keep up-to-date books. Many entrepreneurs wonder if they actually need to keep their receipts, and as long as they have bank statements that business owners can make notes on, Edmonton bookkeeping does not need to see every single receipt, but entrepreneurs need to understand that they still required to keep them in case Canada revenue agency at requests an audit. Business owners should keep all receipts and all financial records for seven years.
In addition to their receipts, business owners need to send Edmonton bookkeeping bank statements as well as credit card statements. The reason this is so important, is for entrepreneurs to be able to verify all of the expenditures in their interim financial statements. Many entrepreneurs also are not sure of how many bank accounts or credit cards are the optimal amounts, and they should understand that in order to keep their bookkeeping simple and easy, they should only have one business bank account that they use for operating expenses and one credit card. By keeping it down to just to things, entrepreneurs can keep it very simple for themselves to keep track of all expenses.
By keeping up-to-date records, and notes of other expenditures, and ensuring that there keeping it simple, business owners can ensure that they are making things easy on their bookkeeper in order to be able to get great interim financial statements that are less likely to have errors in them. By doing this, entrepreneurs can have a great tool for making business decisions.
If business owners are not sure of the most important things to focus on when they start their business, they may underestimate the importance of great Edmonton bookkeeping in their business. Many business owners believe that there able to do everything themselves when their business is brand-new, but if they are not making their books a priority early on, and setting aside time to update their financial statements, business owners are doing their business a huge disservice. Up-to-date financial statements can help entrepreneurs make informed business decisions, which will help them run their company. Since industry Canada says half of all entrepreneurs fail before their fifth year in business, and 29% of them say that they failed because they ran out of money in their business, entrepreneurs should understand the extreme importance of having up-to-date financial statements.
Business owners need to understand how often they should be having up-to-date interim financial statements in their business. While many bookkeepers think that once a month is often enough, Edmonton bookkeeping actually recommends that entrepreneurs have up-to-date financial statements sent to them biweekly. The reason this is so important, is because since most business owners pay their staff every two weeks, they should have up-to-date financial statements every two weeks in order to check their balance to see if they have the money to do so. If they do not, they will be able to engage in some revenue-generating activities or Accounts Receivable in order to ensure that they have the money in their bank.
If entrepreneurs believe that they can simply look at their bank balance in order to know if they have the money to disburse payments, they may actually be doing their business a disservice. The reason for that is because their bank balance shows the money that they have in their bank at that exact moment, without taking into consideration all of the payments that are scheduled to come out either through E transfers, disbursements or checks that have not been cleared yet. If they simply look at their bank balance in order to verify if they have money in their business, they may end up spending too much money and causing payments to bounce.
Not only should entrepreneurs hire Edmonton bookkeeping that will give them statements every two weeks, but business owners should also ensure that they are setting aside time in their calendar to talk to their bookkeeper over the phone about those statements that often. The reason it so important, is so that business owners can ask any questions about those financial statements, find out what they mean or ask any questions about them. This is also a great time for bookkeepers to talk to their clients in order to help get errors fixed, and find out if there is any information that is missing. The more often business owners are able to talk to Edmonton bookkeeping, they will have a clear understanding of their financial statements and be able to utilize that information to make great business decisions.