Accurate bookkeeping is a cornerstone in business. Whether you’re running a small office or a big firm you need a good archiving tool and someone that can enter and retrieve data whenever needed in a reliable professional way. You can imagine how devastating it will be if an error occurred due to a reason such as large amounts of data or lack of revision time.
For one, good bookkeeping helps you arrange your financial information properly which aids in simpler tax calculation and hence timely filing. You pay the optimum tax and avoid delayed payment fines. It can also help you identify areas where you can claim tax breaks early allowing you to plan your expenses and investments well in advance. Bookkeeping can also identify the profits from various segments of your business and the major expenditures. These can be used to tighten the belt on outflows early where ever possible giving you a better financial foundation for greater success.
Maintaining a record of financial transactions is vital for every company. It helps in planning your growth, quantifying your achievements, calculating taxes and if you are a public company it is in fact mandatory to publish your financial statements. Given this importance, many companies prefer to invest in a financial division within their own company for bookkeeping, accounting and tax purposes.
Typically, tough times demand tough decisions – cost cutting. Many companies would look at options where they can reduce their expenses to maintain the bottom-line. Given the limited knowledge that businessmen have about accounting and its relative importance, it could become a target of cost cutting. Some may choose to perform the accounting functions themselves or have it done in-house than give it to an accountancy firm.