Consider this: you need to make a business investment to increase the reach of your client services, but your accounting is not updated and you are unable to provide the financial details needed by the lender. Every business, regardless of the services it offers to clients, needs to have its accounting function in place for several reasons, including profitability and even borrowing capital. For a small business, it might be simple to think that it can do without a dedicated accounting and bookkeeping resource. However, this can lead to several problems, one of which is inaccurate or incomplete financial data.
Need to borrow funds?
Business loans get rejected despite the business itself showing promise of growth. Businesses with a strong services and client deliverables history may also be rejected financial help and funds due to accounting statements that are incomplete or financial statements that are not audited. Audited financial statements are a good marker of the financial health of your business.
In fact, audited financial statements may also influence the lending rate in your favor.
Business accounting services are a vital addition to any small business budget. Compare the costs you would pay to access these services against the advantages your business receives:
> Updated books: Keep an eye on your finances at all times. Updated books are vital to knowing exactly how much money your business has, available to you. This helps when you need to take critical business decisions, such as investments, etc.
> How well is your business doing: Bookkeeping essentials like accounts payable and invoicing details can tell you at a glance whether your business owes money to your suppliers or your customers owe you money.
> Income and profitability: Your accounting statements communicate how well your business is doing. Regardless of the quality of products or services that your business offers, it is finally the quality of your accounting that determines sound representation of your income and profitability.
It is also about credibility
Updated accounting and finance records also provide greater transparency and lend more credibility to your business. Earning investor trust is important for any business and it can influence key business decisions, including those related to growth and expansion.
Your accounting will also reveal how well you have handled debts or borrowed funds.
If hiring in-house resources seems like an expensive proposition, small businesses and enterprises can consider the option of outsourcing. This brings professional accounting insights within reach for the small business, thus ensuring updated and accurate accounting records. Outsourcing also saves money in other ways - reducing the need to make in-house infrastructure investments. Your vendor can take over your accounting work while ensuring that you face minimal hassles. Further, technical matters like automation for business accounting are best managed by professional services providers. This ensures you get work that is not only accurate, but also reliable.