Why bookkeeping is relevant to business growth

When most folks hear or think about business growth, they think more employees, more locations, and typically it’s going to cost a pretty penny. Whether your business is growing at a pace you’ve planned or you’ve had sudden growth which feels like it happened overnight, it is vital that you know where your finances stand so you can make decisions with the most accurate and up-to-date information. Below are a few examples of the importance of bookkeeping in regards to business growth.

1. Loans
   If you are a business owner and you have intentions of obtaining external funding through a private lender, bank, angel investor, or other form of financing, chances are extremely high that the lender will ask to see your financial statements. If you have not kept your general ledger in order and you are lucky (or not lucky, depending on your situation) to have sudden growth, you may need loans sooner than later. Having your books in order will allow you to run requested reports at any time needed.

2. Time Saver
   Let’s be honest, business owners like to do it all if they can. They wear the myriad of hats that exist when a business is opened, juggling between being the sales/marketing/management/finance/IT/etc. person. But the truth is, it’s impossible to give everything your all and it’s also impossible to know everything. When you’ve decided you want to grow your business, you’ll need to focus on those areas of desired growth. It is likely that you will not have time to do everything you once could. This is where a bookkeeper comes into play, providing a means of outsourcing financial tasks so you can focus on the areas of intended growth and save yourself from wasting time doing things for the business that take away from potential growth opportunities.

3. Dreams Vs Reality
   When a business owner has decided they want to grow, the first thing they need to decide is what is the goal of the growth. The second thing is how do they want to get there, and the third is what can they afford to do. If you, a business owner, do not know what you can or cannot afford to do, you will be stuck dreaming about growth without any real actionable strategies. A bookkeeper can provide not only financial statements but explanations of the financial statements to the business owner. A conversation is certainly warranted between the business owner and the bookkeeper to determine where the business stands, but it is not a bad idea to bring in an accountant as well. If a business is looking at growth 3+ years down the road, now is the time to tax plan and asset manage, and neither can be done without financial statements in order.

What are your growth goals for the next year? What about the next five? Make sure you keep your financial books in order so you can achieve those growth dreams!