Most business owners know that it’s important to keep track of their finances, but many also aren’t clear as to why that is. Very simply – without knowing where your numbers are, you will not know if your business is profitable or what the financial health of your business is. It’s not just about government compliance – it’s essential to your business’ success.
When starting out, small business owners wear a lot of hats and try to do it all. Many are stuck with a shoestring budget until things get going. Here’s why I recommend setting aside a budget for a good accounting software: it’s very important to keep accurate records for the CRA and your provincial tax agency. It is also a necessary requirement to have accurate and up-to-date information if you are ever looking to obtain a business loan.
Another reason that a solid accounting software is a must-have is the need for monthly progress reports. It is the best way to obtain accurate and reliable monthly financial statements to get a grasp of what is happening in your business: what is working, what is not, what improvements can be made. Reports such as the balance statement, the income statement, and a statement of cash flows are the basic and very essential reports that will determine a business’ ability to succeed and thrive, or fall apart.
So how do you run a business AND make sure all the essential tasks get done to achieve the goals above? A business owner should really hire a great bookkeeper. One who they can build a relationship of trust and reliability with. A knowledgeable and experienced bookkeeper can make sure all the data is correctly tracked in the accounting software so that they can rely on those essential monthly reports. They can help the business owner understand those reports in order to make sound decisions for the business.
If you have an accountant, they can likely refer you to a great bookkeeper, or you can also refer to the Intuit ProAdvisor directory for Quickbooks Certified bookkeepers. Most of the major accounting software companies offer a similar directory also, such as Sage and Xero.
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