The importance of Bookkeeping as we enter the final quarter of the year.
Updated: Dec 12, 2022
As we have reached the final quarter of the year, it's time to get back into gear and start thinking about managing finances, tax returns, and other important deadlines. This is the time of year when many coaches and consultants should make sure their books are in order.
Being a coach or consultant can be rewarding, but it's important to keep track of your books, especially as you enter the final quarter of the year. To run your business successfully, you'll need to make sure the financial aspects of your business are taken care of as efficiently as possible. This is where bookkeeping becomes a necessity.
In this article, we are going to find out what bookkeeping is and why it is important for coaches and consultants.
What is bookkeeping?
Bookkeeping is a process that involves systematically recording financial transactions. In the past, this was done by paper and pen and it was time-consuming and error-prone. Nowadays, with technology becoming more advanced, every business owner has the opportunity to use modern bookkeeping software that helps them in their accounting tasks.
Importance of bookkeeping:
Although running a business can be rewarding, it also comes with its fair share of worries. One of the main financial responsibilities is keeping track of all your income and expenditure.
Bookkeeping assure you are financially accountable for all transactions that affect your business. It also plays a part in planning for future activities, handling tax returns, and analyzing the performance of your business.
Here are some of the reasons why you may benefit from bookkeeping services as we enter the final quarter of the year:
Helps in making sure that you are on track with your finances
Allows for better cash flow management (tracking how much money is coming in and out of your business)
Saves time on tasks, giving you more freedom to focus on growing your business
Helps in tax preparation and planning
Increases business performance by providing you with the right data to make informed decisions
Allows your business to budget effectively
One less thing to worry about
Why do coaches and consultants need bookkeeping?
As the owner of a coaching or consulting business, one of your biggest tasks is to handle all your expenses and income. This can be time-consuming, especially if you are juggling multiple clients, businesses, and don’t forget your personal life. Bookkeeping makes it easier for you to get a grip on your financial situation by doing the following:
Income statements
If you charge per client, you'll need a way to track the income from each client. In this case, you’ll need an income statement every month that lists all your income and expenses to make sure that you are on track with your finances.
Expense reports
You will have to deal with multiple clients. So it's important to keep track of all your business expenses. Bookkeeping makes it easier for you to create expense reports that show all your expenses in one place. This allows you to have a better understanding of where your money is going and whether you are making a profit or not. (Your bank account having a positive balance doesn't necessarily mean that your business is turning a profit)
Cash flow analysis
Bookkeeping makes it easier for you to track your cash flow by providing you with information about your incoming and outgoing transactions each month. This keeps you updated with where all your money is going. Later, it becomes easier to make informed decisions about future activities and plan for your business. Also allows for better budgeting. Knowing how much you have, how much you still need, and growth potential.
Tax preparation
Since you are running a business, it's important to make sure that all your transactions and income are recorded accordingly. If you do not keep track of them, it could lead to an audit (Now referred to as examination or review) by Uncle Sam. Bookkeeping makes it easier to record your income and expenses accurately, so in the event of an examination you have accurate clean books to present if needed.
Business growth
As a coach or consultant, you are constantly looking for ways to grow your business. By using bookkeeping services, you don't have to worry about analyzing numbers and financial reports because it will be done on your behalf. You can save a lot of time that you can use on other important business activities. You can focus more on clients, lead generation, and other important aspects that improve your business growth. You can also have your time back for leisure with family, friends or just by yourself if that’s more your speed.
Increases business performance
To increase your business performance, you have to make the right decisions and have the right data to support them. Bookkeeping gives you the right information that can help improve your business performance. It provides you with all the necessary reports and insights that allow you to do this.
Peace of mind
One of the most important benefits of having bookkeeping services for your business is peace of mind. We all know that running a business can be stressful and having to deal with numbers and finances can be overwhelming at times. Bookkeeping makes it easier for you by taking care of all those tasks so you don't have to worry about them anymore. It provides you with the right data as well as insights that you will need to make the right decisions.
Final thoughts
As we enter the final quarter of the year, bookkeeping services are more important than ever. They help in a lot of ways that allow you to focus on business activities that can sustainably grow your company. If you're a coach or consultant, bookkeeping becomes even more important as you need to handle multiple clients and track your income and expenses for each one of them. Keeping your books accurate and up to date is vital to running your business. Your cash flow is only as good as your reporting and accounting.
If you find yourself stuck, struggling to grow your business, overwhelmed by day-to-day tasks, unsure of how and when to file taxes, overspending, neglecting your books and many other financial gripes about your business, reach out to us and we will be happy to lessen those burdens and assist you with scaling your business. Schedule your complimentary session today and let us get your books and finances on track or take it off your hands.
Shane,
Profit First Taxes
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