Leveraging bookkeeping means being able to say how your business is going. This is why we decided to write this article, so that you can learn everything you need to know about it and start improving your business management.
What is bookkeeping
First things first, what is bookkeeping?
According to the dictionary, it is the recording, storing and retrieving of financial transactions.
In other words, when you do bookkeeping, you are keeping track of every movement of your cash and investment.
It’s a very old practice that helped businesses and individuals for thousands of years. And if it survived all these years, who are you to doubt its efficacy?
Why Bookkeeping is fundamental for your business
Smart entrepreneurs are already doing bookkeeping. They can do it either hiring an accountant or using a bookkeeping software. They know that keeping track of every financial movement is fundamental if they want to have an healthy business.
Let’s see together all the reasons why you should start leveraging bookkeeping as soon as possible.
1. Taxes payment
Any business and individual must file the annual tax returns. You can’t escape it.
Doing bookkeeping allows you to survive to the tax season easy and fast. You will be able to present all your financial information in an accurate and professional way. You won’t need to get anxious and paranoid about gathering all the relevant receipts and bank statements last minute.
Moreover, bookkeeping allows you to save money too. In fact, thanks to this practice you will know what your deductibles are and which one you can use.
2. Cash Flow Tracking
Bookkeeping allows you to keep track of your cash flow. This makes it easier for you to have all your financial information at hand. This means that tracking cash flow is fundamental to optimize the financial strategy of your business.
3. Expenses Track
Doing bookkeeping means knowing what are the expenses of your business. This is important if you need to know how much your business costs you in a year, quarter or month.
4. Business’ Health Check
Without bookkeeping you will never be sure that your business is truly profitable. Having record of every movement means knowing how your business grew and being able to draw comparisons with previous years.
5. Report Creation
Thanks to bookkeeping you can start creating your financial report. Reports are fundamental if you want to find new investors (e.g. VCs or Banks) or to give your current stakeholders a recap about the business.
6. Future Planning
Finally, bookkeeping allows you to plan for the future.
Having precise and trustworthy information gives you the opportunity to work on the future budget for your business.
What factors you need to keep record of
Bookkeeping is about keeping record of different elements of your business. Let’s see some of them together.
First of all, cash. You need to record all the cash that comes in and goes out for your business. This is a fundamental element for you to keep track of.
Second, sales. Whether you sell products or services, you need (and you’ll love) to record every sale you make.
Third, money due from customers. This is particularly important when it comes to businesses that sell on credit or that provide COD services to their clients.
Another key factor are businesses expenses. They are related to your office, your employees and any other billing you have to pay to manage your business. Remember that these are fundamental information for the tax returns form.
There are many other accounts you may be interested in. Yet, these are the most important ones if you want to start keep record of everything that goes on in your business.
What to never forget when doing Bookkeeping
Now you realize: bookkeeping is fundamental.
It helps you understand how your business is growing, what are your expenses and what your revenues. It makes it easier for you to file tax refunds and being in compliance with the law.
If you want to do it right, though, there is something you should never forget.
First, you have to keep your personal and business finance separated. Create two different bank accounts so that you won’t mix up all the expenses of your lives.
Second, keep record of everything. It doesn’t matter how little the amount of the transaction. In this way you will have the situation under your control all the time.
How uDroppy helps your bookkeeping
If you work in e-commerce, uDroppy can help you keep record of all the transactions done on the platform. We send you an invoice every time you fulfill an order. In this way, you don’t have to worry about justifying business expenses when you are filing your taxes return.
Moreover, you can keep track of all your sales and gross margins in your dashboard. There you can filter these elements according to the specific period of time you are interested in (e.g. current month, last 7 days, etc.).
If you want to see your expenses you can check the order section, and the order history sub-section, where you’ll see all the orders you paid to uDroppy, and specific details about each one of them.
Or you can go to the Invoice section, where you’ll find all the invoices you received for the orders you paid. You can download or print them right away, or do it later. Whenever you need. Again, by clicking on one invoice, you will be able to open it and see all the details.
If you don’t want to lose money while doing e-commerce, and you don’t want to risk your entire business because you forgot to print an invoice, you need bookkeeping.
uDroppy can help you with to keep track of your financial records too thanks to the useful sections of the platform. But our focus is the automation of all the complex processes of the business, giving you time and freedom to focus on the rest.
Thanks to our fully integrated platform you can create your own business even with a low budget.
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