Bookkeeping has immense importance that has increased with the growing number of small-sized businesses in the market. However, almost half of those recently launched startups would, unfortunately, face the imperiling risk of failure during their first 5 years of operation. The fundamental reason behind such failure would be immature accounting or financial management, whether due to lack of experience or not knowing the importance of accounting and records roles.
What is bookkeeping?
It involves the recording, keeping and retrieving financial transactions for a company, an organization or an establishment. Common financial transactions and tasks that are involved include billing for services provided or products sold to clients, recording receipts of transactions, verifying and recording invoices and receipts from suppliers. Moreover, Purchases and supplies payment recording, processing employees’ salaries and wages, and the related governmental reports. In addition, it requires knowledge of debits and credits and a basic understanding of financial accounting, which includes the balance sheet and income statement.
Why is bookkeeping important?
It is emphatically important for every business disregarding its size for it holds foremost importance and vitality that would literally endanger or help the growth of a certain business. The importance of it is due to what exactly it helps with:
- Organizing the financial transactions records in the sense of invoices sent and payments received or collected. Moreover, it is needed to track everything like payables and receivables. Ideally, how a business manages its cash flow directly influences what investors get as pure profit eventually and it would be extremely efficient to have a system from the very beginning, instead of the calamity of chaotic finances.
- Keeping track of finances makes it a simple thing to go through the monthly bank statement and make sure everything matches up. This is called bank reconciliation. Accuracy makes reconciling bank accounts in hand and prevents banking errors from causing financial complications.
- When the business is growing and investors consider financing to help with expansion, it is inevitable to have tangible evidence that the business is actually running and successful; records can provide such statements and figures that support it. At the matter of fact, its accuracy is the foundation that generates that evidence. Whether it is for expansion purposes, audit purposes, taxation purposes, proper precise records, could easily generate reports such as balance sheets and profit and loss statements that are critical, crucial and essential to helping a business generate accurate parameters for how the business is going!
IBG can help you with Best Dubai Bookkeeping Services through availing the par excellence team of the best bookkeepers in the UAE to help with the financing and the report generation. IBG will give you an actual status of how the business is going. Our consultants will help you choose which path to take next, for steady profitable and rapidly growing business.