How Accurate Record Keeping Can Help Businesses In Financial Planning
Maintaining an existing, flourishing business or starting a new venture can be a daunting task. There are several risks involving in the businesses and the major that needs prime attention is “Capital”. Finance is one thing that gets you worried when they are not handled seamlessly. When the businesses fail to streamline their capital resources it may ruin into huge financial mess. Businesses who seems to be doing good practices accurate financial planning. And this only happens when the records keeping are handled by the experts.
A lot of business owners figure that they will be saving some money by doing it themselves as; they think hiring a professional record keeping services is going to be too expensive. Unfortunately; this mentality can cause problems later on, as record keeping requirements dictate that businesses are required to maintain accurate and timely records which promotes good financial health for the businesses.
Financial Planning – Getting The Basics Right
Record keeping has now become a mandatory legal requirement for every businesses hence; it is necessary to retain the financial records for at least 7 years. The practice of maintaining and streamlining the record isn’t difficult when you plan for the essentials in advance or when you have an expert financial consultant like Pozitiv Advisors at your services.
Importance Of Record Keeping For Financial Planning
The bare essentials to maintain are a sales ledger, a cash book to record money as it enters and leaves your business, a wages book and a purchase ledger to monitor all outgoings. You need to make sure that you keep copies of receipts, contracts and other documentation as it comes in or leaves the company. Missing receipts are a headache which nobody wants. Hence; this can easily be avoided with the correct processes.
Plan in advance and make sure all these areas are considered. Some businesses may choose to employ a professional company like Pozitiv Advisors to handle finances and to maintain entire financial records which seems to be good and viable option hence; you can focus on your core business activities with a peace of mind.
Record Keeping – What Makes It So Crucial?
- Maintaining accurate record keeping can provide financial insights which helps further to operate your business efficiently. Therefore; increasing your profitability.
- Having a streamlined records will enable you to identify all your business assets, liabilities, income and expenses. Hence; when the very same information, when compared to appropriate industry averages will helps you pinpoint both the strong and weak phases of your business operations.
- It is important to keep records well-maintained for the preparation of current financial statements, such as the income statement, profit and loss as well as cash-flow projection. These statements, in turn, are crucial for maintaining good relations with your business partners, investors, bankers etc.
- Having good record keeping will help you present a complete picture of your total business operation, which will benefit you as well in the long run.
- Good records plays a crucual role during tax time. Having poorly maintainted records can cause you to underpay or overpay your taxes. Additionally, having accurate records will get your audit seamlessly done.
How Exactly Good Record Keeping Help In Financial Planning
For businesses keeping a well-maintained records is crucial considering several aspects and the needs of the business. Having an up-to-date records not only helps satisft several business obligations but; it may save you money and time. Know exactly what your business records tells about your business and how it will help in financial planning.
- Your records conveys how much the income is generated and how much income can you expect to generate in the future.
- How much cash is tied up in accounts receivable thus; not available to you and how long it will take?
- How much have you spent on Merchandise? Rent? Inventory? Equipment?
- What are the overhead expenses and how much it is taking up your revenue. This includes payroll, payroll taxes, merchandise, advertising, equipment and facilities maintenance, and benefit plans for yourself and employees such as health insurance, retirement, etc.?
- How much cash do you have on hand? What is your actual working-capital budget?
- Which of your products, departments or services making profit, which are breaking even, and which are the financial drains?
- How do all of the financial data listed above compared with last year – or last quarter? Are they furthering as per the projections in your business plan?
- How do all the financial data compare with those of your competitors? With those of the industry?
- What is your gross profit? What is your net profit?
It is essential that you try to determine the precise financial condition of your business. It is as critical as maintaining good customer relations. Good recordkeeping is time-consuming and can take away from the time you need to run your business. Therefore; having an efficient financial consulting services like Pozitiv Advisors can add positive value to your business by providing end-to-end practical solutions to your finance function.
Financial Planning For Future Projections
Projections, as well as good accounting records, are important tools for a small business. They will help answer important questions about the company’s financial future and provide direction. The failure to make proper projections, even if only informally, reduces the potential for long-term success.
Do you need to streamline your record keeping? Pozitiv Advisors offers range of financial services and record keeping tops the list.
Help Your Business Reach Peak Performance
Pozitiv Partners aims to provide effective solutions consistently to the finance function of a business. Our core values includes integrity and respect with all the people we deal with.
We aim to be true to our name, adding positive value to your business by providing end-to-end practical solutions to your finance function. Their financial management and associates have an in-depth experience in handling complex situations arising in businesses.
Pozitiv Partners has a client retention ratio of 95%
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