Full Bookkeeping Services in St. Louis
A good bookkeeping system DOES matter for a business’s success.
Using simple logic, and in a perfect world, a proper bookkeeping service provides accurate and up to date financial reports which all small business owners should use when making financial and other planning decisions. Of course, running one’s own business is usually done under less than perfect circumstances.
Decisions are often time – sensitive and more reliant upon emotion and intuition as decision making factors than cold hard data. And honestly, some decisions rely more on financial data than others. Couple this with the fact that many business owners think they know exactly how much they bring in and how the money was allocated throughout the year – kind of a shoot-from-the-hip approach. Some may actually be close, too; they can probably ball park all of the major costs and expenses.
However, in the super-competitive business world that we all operate in there is little room for error.
With rising costs, potential for shrinkage from internal and external losses, and margin erosion from customer service-related issues, experience shows that even a little over-spending or underestimating expenses can snowball quickly. These factors may determine whether you will either make or break it during the process of running/owning your own business.
You Need to Use a Full Bookkeeping Service
The obvious solution is to use a full bookkeeping service and actually use it consistently. Many small St. Louis business owners started their books with a shoe box full of receipts and (if they’re lucky) an Excel spreadsheet. To be honest, there is nothing wrong with keeping things simple when the business is a new start-up and its transaction count considered relatively low.
But what happens when your business starts to take off, your revenue doubles in a year and you are spending all kinds of money to either operate or promote your business on a daily basis? That’s great news, to be sure, but left unchecked, you might easily spend yourself out of business, or at least into serious debt before realizing it.
According to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School, about three-quarters of venture-backed firms in the U.S. don’t return investors’ capital; in other words, they fail. As many as 50% within the first year, and the rest within 5 – 7 years after that.
A typical start-up scenario can go like this: After 6 months to 2 years of spending all of the time learning the ropes running the business and trying to keep things afloat, a business owner then realizes that he or she needs to go back to catch up their books, as they don’t accurately reflect the financial position of the business, and are useless. The owner was planning to spend a little time each day trying to do some updates, but ……..it never happened. At this point, what should they do? Hire a bookkeeper and through data entry on already inaccurate numbers, make things progressively worse, or go back to some starting point and start clean, doing it right?
An accurate bookkeeping service is not only a valuable tool to keep you informed regarding all the critical financial information in your business but can also be considered a great investment that will provide an excellent return if it has been managed effectively. A good system started at the beginning, (or as soon as possible thereafter) provides a zero entry platform where the business owner or bookkeeper doesn’t need to spend much time doing the books but the results will tell you everything you need to know about your business.
One of the most fundamental things accurate records can do is show how much gross revenue is needed to be at the break even point, and where all the money went, because after all, “Numbers Don’t Lie”.