What’s the big deal about keeping good business records anyway?



Q

What’s the big deal about keeping good business records anyway?

A

Many businesses fail because of poor records. Good record keeping is necessary to highlight problem areas that could cause the failure of your business. Most business owners neglect their bookkeeping and record keeping because of lack of time, lack of expertise or lack of funds to pay someone to take charge of that area.

They focus on increasing sales and generating profits, but fail to see that if their recordkeeping system is inadequate and unable to highlight situations that need correction, things could happen that will cause the business to fold. A good system will provide the following information:

  • It will show what money is coming in and going out of the business
  • It will show how much cash is sitting in your bank account and how much money is due in from customers and clients. 
  • It will show how much money is due to suppliers that you bought goods from on credit
  • It will show the amount of stock and its value sitting in your shelves, factory or showroom
  • It will show the amount of money that paid out for wages and salaries  
  • It will show the assets that the business owns and the debts it owes at any particular time
  • It will show which products are selling the best and which are slow moving
  • It will show what profit or loss the business is making
  





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