Why Bookkeeping is Important for Small Businesses and Startups? Top Five Reasons
In this article, we will see importance of bookkeeping and top 5 reasons for maintaining accounting records for a small businesses.
Before that we have to understand the meaning of Book keeping of accounting record. As name suggest, book keeping is maintaining and recording of books of accounts and regular updation thereof. The maintenance of books of accounts refers to a system whether manually or electronically. In today’s parlance, manual keeping of books of accounts is very rare. Currently, books of accounts are maintained in electronic mode.
There are many software of keeping books of accounts. However, the most popular software in India is Tally. The best CA firm or the best CS firm are qualified to manage the book keeping and maintaining accounting records.
Let me tell you the top five reasons for maintaining bookkeeping and why it is important for a small business and startups:-
Maintain Record of Accounting
Generally, Accounting records are maintained to know the exact figures of sale, purchase, profit and loss. It is important to know that where our business stands and what is the growth of a business. Also, it helps to get problematic areas where we need to work and resolve the issue to get our business profitable.
The basic principle is that if you know your business figures, and strong areas of your business then no one can stop you to grow.
We know maintaining accounting record is technical and time consuming work and in order to get your accounting done, you may hire best CS firm in Delhi or the best CA firm in Delhi.
Compliance with applicable laws
In order to run a business operation, a business need to comply with the applicable laws of business and in India, there are various business laws that required your financial reporting includes figures of sale, purchase, income and expenditure. Various laws are like income tax, company law and GST laws.
Therefore, it is mandatory to get your financials prepared by the Top CS firm in Delhi and the best CA firm in delhi and the same get audited by the qualified Chartered Accountant in delhi. So that business can be fully complied with the applicable laws.
To control day to day operation
Small business and start up are vulnerable to the potential risk of more expenditure which resulting in huge losses and to avoid risk of loss, a business owner must know figures of expenditure in comparison to his income and expected profits and losses, which help in controlling the expenditure and higher the profits.
Controlling a business operation need exact figures of segment wise income and expenditure. A well controlled business is the well planned business.
Optimum utilisation of Resources
Resources are referred to the inputs which a business required like raw materials, essentials, water, gas, electricity etc which is necessary to run a business and Utilisation means to use such resources to get final products and service for a business.
Book of accounts helps in tracking resources and locate where resources are wasting and they are fully utilised. The optimum utilisation of resources are the best way to maximise the profit in a business and the best CS firm in Delhi helps in getting a best business model for the best utilisation of resources.
Help in decision Making
know, profit, loss, income and expenses:- As discussed earlier, Accounting figures helps in understanding the profit, loss, income, expenses, assets and liabilities.
Knowledge of business figures are essentials for managing the business operations and to maximization of profits and the top CS firms and the top CA firm in delhi are available for the Book keeping of accounting records. The best CS firm will maintain the accounting records and also help in to be complied with the applicable business laws.
Hence, to conclude that, the accounting records are very important specially for a small business and startups.
And this accounting keeping work can be outsourced to a qualified CS firms in delhi and Qualified CA firms in delhi.
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