Hi Founders! ???? Let’s talk about bookkeeping!
For the past few weeks, we have been sharing insights that can help your business thrive. You know Finance management is important, right? Well, Bookkeeping is even more important.
I used the term ‘bookkeeping’ in place of ‘accounting’ because I wouldn’t have you thinking of a difficult subject (yes, I know you are an entrepreneur and not into Luca Pacioli stuff ????).
Bookkeeping, in simple terms, is the act of recording transactions in your business to break it down. It means proper attribution of every thing that happens to the business cash or bank balances. This discussion is as important as financial management and you don’t have to wait until you can hire an accountant before you start, although you can outsource that function.
Why You Should Have Proper Bookkeeping Records
- It helps to track your spending
- Proper attribution of transaction, it also makes it easy for categorize (for example you can know the percentage of salary in your total expenditures)
- It makes it easy to ascertain profit or loss
- You may not understand this but it actually helps with reducing your taxes (expenses are usually meant to be deducted from profits. Proper bookkeeping will let you know your total expenses)
- Bookkeeping also makes it easier to catch thieves.
Proper record keeping is not hard. Make sure you have evidence for all your transactions.
????Microsoft Excel is simple and can be used for your records
???? You can store soft copies of your receipts on Dropbox or Google drive. You could also keep the hard copies in folders to keep your hard copy receipts. Make sure they are well arranged
???? You may also consult an accountant for guidance on book keeping (they are ubiquitous).
Thank you for staying through the Startup series. I hope you have picked up valuable lessons for your business. Keep building, and never give up!