How to Check Your Bank Balance
For many business owners, the financial health of their company would be summed up as the balance in the bank account. Not to discount the importance of cash, relying on it is a barometer of the financial health of a small business is short-sided and more times than not leads to the downfall of a business. Every organization has aspects of the business outside of cash that needs to be reviewed monthly, weekly, or in some cases daily. The bookkeeping function of a business is what can facilitate this information.
The foundation for this information is accurate and timely financial statements that are a result of the bookkeeping function of your organization. Bookkeeping services include customer billings, collections, payables, account reconciliation, and payroll processing. The importance of having timely and accurate records can lead to the following benefits:
Increased Cash – having a timely invoicing process will convert accounts receivable to cash quicker
Better Cash Management – having accurate timely financials will give you an insight into where cash is being spent
Better Customer and Vendor Relationships – as much as you dislike when customers pay you too slow so do your vendors. Having timely accurate account balances will allow you to see when customers are past due as well as when your bills are past due.
Audit trail – the bookkeeping function will provide an audit trail to all transactions recorded in your accounting software. This will allow you to increase accuracy as well as to detect and prevent fraud.
For many startups and small businesses, the owners or founders take on these tasks. Many underestimate these tasks and think it is a simple process and they will save time and money. As an entrepreneur, your most valuable resource is your time. You should spend that time focused on the drivers that will result in the success of your business. As such, these tasks fall to the lowest priority and the insight that could have been gained by having financial statements is lost.
Recognizing the importance of accounting data early on for both the day-to-day decisions as well as the long-term vision of the organization will allow you to make better more informed decisions. Don’t underestimate the importance of timely, accurate accounting records. More importantly, recognize that this is not the best place for you to spend your time as an owner or founder!