One of the most important parts of running a business is thorough bookkeeping. Santa Rosa businesses must be aware of the benefits and keep careful track of their financial transactions.
Maintaining accurate financial records is a very
important part of running a business. Companies that fail to make their bookkeeping
a priority often run into serious cash flow problems down the road. Although a professional
bookkeeper can make sure the process runs more smoothly, you will still need to
make it a priority early on.
Peter Caputa, the Vice President of Sales for Hubspot once stated “Lack of planning on your part does not constitute an emergency for me.” Many professional bookkeepers have used his quote to warn clients that they can’t fix major problems that arise from months of poor record keeping. And, though we won’t turn our back on any client that needs our services, it is not how we want to conduct business.
We continuously encourage people to seek bookkeeping help and thus minimize the risk of problems that may arise. Since many financial problems stem from poor bookkeeping, Santa Rosa businesses need to seek help right away. Here are some important steps that they should take.
You will need to cross reference your bookkeeping journals with your financial accounts. Unfortunately, cross-referencing financial data can be very difficult if you use your personal credit card or bank account to make purchases. Establish separate accounts for all business transactions and make sure that you don’t comingle them with your personal expenditures.
You may have given some of your employees the authority to make certain purchases on the company’s behalf. Unfortunately, they may not understand the importance of recording financial transactions. Make sure that they record all purchases to ensure records are accurate and up-to-date. They should also be required to make purchases through a company credit card to make it easier to cross-reference their purchases.
Some business owners only track their cash expenditures. Unfortunately, they may have many outstanding accounts payable, so their actual equity is much lower than they expect. They may make large purchases that they can’t afford, which will create serious problems down the road. They may unexpectedly discover that they don’t have the necessary funds to pay their bills or are unable to invest in new capital they desperately need.
The only way to avoid running into this situation is by recording every accounts payable transaction. You always need to know how much cash you will have on hand after paying off your bills. It is a good idea to make an accounts payable entry as soon as you receive an invoice.
Every entrepreneur is in business to make money. However, a surprising number of business owners fail to keep track of money that their customers owe them. They forget to record accounts receivable entries, which means that they end up forgetting to send out invoices. This is one of the worst mistakes a business can make, so always make sure that you document these transactions.
Few people get excited about crunching numbers, but it is an essential part of running any business. Most financial problems stem from poor bookkeeping. Santa Rosa businesses need to properly record all financial transactions to prevent these problems from arising.