Good bookkeeping is also helpful for securing investors who will want to see your financial records before making a decision to support your business. Keeping detailed financial records reflects well on you as a business owner, and for you to know exactly where all your money is going will allow investors to see you as a very competent investment. In addition, keeping your books in order makes it so much easier for you to paint a picture of your business’s current financial state and its potential for future success. Even if your business didn’t make much money this year, if your records can prove that your business is profitable overall then investors will be more confident about making the decision to support you and your business financially.

Bookkeeping best practices also allow you to understand your own business and exactly what is allowing it to do so well. For example, you’ll be able to see whether increased profits are coming from a specific product or from higher traffic.

If your sales are increasing due to a specific product then you’ll be able to see that from your books and you’ll be able to make the decision to order similar products. If your sales are increasing due to more traffic then you probably want to revisit a particularly successful marketing campaign. In this way, good bookkeeping helps reduce business risks and helps make business decisions less of a gamble for small business owners.

Bookkeeping over the course of a few years will also make it easier for you to estimate how much tax you’ll owe. If your profits and losses remain stable over a few years, you can get an idea of how much you’ll need to set aside each year for taxes or of how much you should be charging your customers for GST or HST.

Last but not least, keeping proper and up-to-date records is essential for filing taxes and getting the most tax benefits. Your records will allow you to fill out a tax return that’s fair and accurate and will help you earn the deductions and rebates you deserve.

No matter if your business is just starting out or it’s been years since it first opened, we at Ottawa Bookkeeping recommend you to hire an experienced accountant to do your bookkeeping for you. Having another experienced professional look at your records will allow you more time to focus on your business and how to grow and improve it, and there is a lot less room for error when a professional accountant is looking at your books.