One major challenge start-ups and young entrepreneurs have is difficulty accessing funds. Often they blame lenders as being stringent with their requirements for giving out loans. Ironically, banks are in business to lend money.
So, once they see that your business is viable, they are always ready to fund you, because this is the major they make their money.
However, beyond security required for these funds, one major reason budding entrepreneurs have challenges accessing bank facilities, is many of them have poor bookkeeping.
Lenders want to see how cash flows in and out the business and they can only track this with good bookkeeping.
It has been reported that many businesses in Nigeria die within their five years of their establishment.
One major reason adduce for high mortality rate of businesses in the country is financial mismanagement and poor or no bookkeeping.
This stresses the importance of good documentation is business. There are immense benefits which entrepreneurs stand to derive from good accounting or bookkeeping. Some are discussed below:
Better financial analysis and management
Bookkeeping would help you properly manage your cash flow. It would enable you systematize up-to-date follow-ups, invoicing and on-time payment for suppliers, which could be clumsy if not properly documented.
It allows anybody to have a comprehensive view of how your business is faring without having to be part of its day-to- day to running.
Reporting to investors is Easy
The process of reporting to your investors on crucial information about the financial status of the company is no longer a worry.
From charts, graphs to lists of data presented to the investors are all acquired from the book of account.
Business planning is easy
What you need is only the Balance Sheet and Profit & Loss to check if the company is on the right track financially, from there you can start your business planning so much easy.
Fulfillment of Tax Obligations
With bookkeeping you can easily track on any information and documents in order to meet your tax obligations. If your books are tidy, you don’t have to running from pillar to post find all those bills or try remembering expenses whenever you have remit your taxes.
Tax returns are also made easier with an organized Balance Sheet, Cash Flow and Profit & Loss, your tax advisor will devote time in giving you sound tax advice instead of correcting entries in the financial statements.
Makes auditing easy
Bookkeeping keeps record keeping properly organized from small to big invoice. It makes retrieving process easy once audit time comes
If you don’t know how to go about bookkeeping, you can always contract it out to an accountant, who will help you out with this.
Don’t mind the cost, because it is costlier not doing it. Bookkeeping can make or mar a business no matter the amount of money that is invested into it.