Have you beaten the budget blues yet? How did you cope with the setting up your budget? I hope you are feeling more in control now.
To recap your budget helps you to build a relationship with your money. It allows you to have a knowledge and understanding of where you are using your money and allow you to be more efficient in running your business.
You now understand the basics of putting a budget together you will be able to start maintaining your financial records. Financial record keeping or accounting is the one thing that all businesses have in common. It is one of the most important things that a business needs to do.
Some important reasons why you should be keeping financial records are as follows: –
– You need to know where your business stands financially to be able to plan how you are going to operate going forward and to allow you to make the best financial decisions for the business. It is important to know where your business stands on a daily, weekly, monthly and annually from a financial point of view. You need to have a vision for your business (your budget helps with this) and you have to be able to track the progress you are making towards achieving your vision and goals for your business. Do you know how much money is in your bank account? How much stock or inventory you have on hand? Which suppliers still need to be paid? Are your taxes up to date? All of this can be easily answered by making sure you have an up to date set of financial records.
– Good and accurate financial record keeping allows you to identify strengths and weaknesses in your business. The business owner will have greater control over the day to day activities of the business and this also allows reporting back to shareholders and investors to be an easier task.
The key to good and accurate financial recording keeping is being consistent with your record keeping. Breaking down your tasks into small, manageable tasks so that they don’t seem overwhelming – especially in the beginning is an excellent start. It is also vitally important to keep all your supporting documents like invoices and receipts.
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