What are you talking about? Bookkeeping as Rocket Fuel!
Well if that’s how you feel then give me just short minute to explain….
I wrote this essay because it’s what I believe. I’ve worked with a lot of companies. And the ones that put the effort into tracking their results, do better. Simple as that.
Not to sound overly dramatic, but you really can’t go very far into the conversation without talking about the most likely outcome if you’re not watching your numbers. That would be your company fails. Closes its doors…. However you want to call it!
There’s any number of reasons your company can fail:
- Not having enough capital can handcuff your strategies.
- Certainly not enough working cash.
- No plans, no map, no outline of how to execute your ideas.
- Obviously, no demand for what your selling will shut you down.
But how ya gonna know these things if you’re not tracking your results. Y’all need good bookkeeping. That’s the only way.
I was hoping not to define what bookkeeping is. The short version is record all the company’s transactions for ‘Money in, Money out’. You do need to pay attention to the details, things like what’s owed to us, who do we owe. When you do that, you discover things like “What sells the best” or “What type of customer buys the most”?
Big Tip Here – Keep the Books Current. Meaning daily, even hourly. Make your life simpler by staying on top of the data and reap the rewards of knowing your up to date numbers.
Measuring your results is the real reason you do bookkeeping. Reading reports that track your decisions and strategies is the difference between average and outstanding profits.
There’s much wisdom in the cliché “You can manage what you measure. And what you measure you can improve”!
When you track your results, your goals become real. Your projections and plans gain momentum. They’re no longer dreams or wishes. When you’re able to compare where you are to where you want to go, you get excited. Your energy and enthusiasm about following through on your ideas get some legs under them.
Good bookkeeping makes you more productive and pro-active. You can see problems before they erupt into fires.
And let’s not forget about Uncle Sam. It goes without saying, taxes are a pain. Having good books lets you plan ahead so you can manage your taxes. Budgeting and being prepared saves taxes.
All the reasons we’ve talked about above about why bookkeeping is important are pretty much common sense, proven, and I’m going to add factual.
But there is one more big reason why you need good books. I tell my clients all the time the most important thing you’re producing is not the services and products you deliver, but ‘The Company’ itself. When the time comes to sell, and it will come, potential buyers want good books to sink their teeth into. Without proof the value of your company goes way down. Not to mention how critical having a good credit line can mean to your company as well. Bankers and investors will trust you know what you’re doing when you have books to prove it.
I know what you’re saying “it’s just bookkeeping, please Michael, you’re killing me. But you ask any successful entrepreneur, they’ll tell you, ya gotta know your numbers. You can’t run your business from your checkbook. Constantly going online to see what checks have cleared, totaling your deposits to get Sales, is no way to run a business.
Keeping Good Books is not Rocket Science, but it is the Fuel that powers your company!
What shape are your books in?