If you want to ensure that your financial records are accurate, bookkeeping is the key. In addition to the fact that the law requires you to keep accurate books and records, doing so will save you frustration in the future. It’s easy to get caught up in the process of big business operations when you’re new to the business world. It can be easy to overlook the most crucial aspect of running a business–finance–when you have so many responsibilities and shoes to fill.
Remember, the fundamental function that ensures the survival of your business is effective financial management. You run the risk of not being able to keep track of gains and losses if you don’t properly monitor your accounts. Your capacity to make sound decisions is hampered as a result. Here are the reasons why bookkeeping is so important and why you should start taking responsibility for it or hire professional bookkeeping services in the Philippines to do it for you.
1. Leaves paper trails for business decisions.
When making business decisions, all businesses heavily rely on their current and past financial records. You can see your company’s financial health through bookkeeping. Reviewing financial resources and expenses is easier when income and expenses are properly organized.
You can learn which business lines or products are working and giving profits or not by doing your bookkeeping. Focusing on your company’s strengths and addressing its weaknesses can be accomplished by analyzing your books of accounts. If you’re not adept in crunching numbers, reputable accounting services in the Philippines can do it for you.
2. Assists your business in obtaining funding.
To finance future projects and assist in your company holistic growth, you’ll need to turn to investors or banks and loan companies. In order to determine whether you are able to repay any loans, these businesses will ask for copies of your documents and records.
They will be unable to evaluate the financial health performance of your business if proper bookkeeping records are not kept. As a result, they would not be able to give you loans since you don’t have evidence of your fiscal health. In turn, this would would make it harder for your business to expand and grow.
3. Helps you avoid dreadful payroll services.
The payroll process might appear to be straightforward. The employee works and is compensated for a certain number of hours. Simple, yes? No. What about employees who quit suddenly, part-time contractors, paid maternity leave, night differential, and overtime? The 13th month’s pay also differs significantly from the Christmas bonus.
When it comes to salary season, if you don’t have a good bookkeeping system in place, you can anticipate getting migraines. Additionally, incorrect documentation may result in underpaying or overpaying your employees due to incorrect calculations.
You will have to scramble to compare the actual cash in the bank to what is written on the payroll if you have a poor recording system, which will also leave you with a nightmare when it comes to taxes. This might even be the reason for filing an employment case with the Labor Commission, who knows? Tax services in Manila recommend saving yourself from this terrible ordeal by hiring reputable accounting and auditing services in the Philippines.
4. Assuages and satisfies the BIR.
Bear in mind that income and other financial statements serve as the foundation for tax computations. You can anticipate BIR officials to furrow their brows if you have poor bookkeeping systems or none at all. Miscalculations and errors not only reflect your company’s values but also have the potential to result in stiff penalties that would certainly eat at your profits.
In addition, you may be subject to a BIR audit and investigation if you commit a recurring offense. Worse still, get ready to face the dreaded tax evasion case if you don’t have any records at all and have no taxes to file. This could even result in Oplan Kandado and eventual business dissolution.
Make Bookkeeping and Accounting a Priority
You now understand the significance of bookkeeping, so don’t be remiss in keeping your records updated. Diligent bookkeeping and accounting practices could save you time, money, and stress. Certainly, bookkeeping is not an easy job. It necessitates constant monitoring and updating in addition to meticulous attention to detail.
However, in spite of its difficulty and despite how much you despise it, it is every business’s lifeline. You can determine areas in which your business can expand and, conversely, areas in which it requires improvement through the use of financial records. Consider employing a bookkeeping professional for assistance if you find yourself struggling. Call our team for help and take advantage of our free 30-minute consult. We provide bookkeeping and accounting services in Pasig and beyond.