Keeping Clean and Accurate Books

Improve Cash Flow Management

• Forecast upcoming expenses – avoid the surprises that can negatively impact cash flow and alter planning. This allows businesses to plan for future expenditures and arrange for ways to fund necessary expensive expenditures.
• Plan for seasonal slowdowns – most businesses are cyclical in nature and those that have a handle on the business cycle can better plan for those downturns by minimizing the negative cash flow impact (delay inventory purchases, accelerate
  collections, adjust staff size to name a few).
• Identifying late paying customers – avoiding tying up cash in receivables, particularly past due receivables. Focusing on these customers with increased collection efforts, adjusting credit terms, etc. is an effective way to unlock cash.

Clear Financial Visibility

Good bookkeeping allows you to:

• Measure revenue and expense tracking accurately – you can’t effectively manage a business with inaccurate or missing data. Decision making relies on accurate data but just as important, that data must be timely to be relevant. Accurate date that is stale is much less useful and can be misleading if the business environment has changed.
• View up to date profit margin – which products are successful and which are not? Of those that are not, do we need a price increase or do we need to discontinue? Does the product mix need to be changed? These decisions all depend on reliable information to reduce guesswork.

Improved Forecasting and Budgeting

• Analyzing past trends – this can be done easily, and planning decisions can be made more confidently with accurate information.
• Projecting realistic growth trends – done in conjunction with understanding the current market environment, utilizing accurate financial information is invaluable in growth projections and provides a guard rail to overly optimistic speculation.
• Accurate budget assumptions – assumptions based on accurate historical data provide meaningful and realistic targets for managing the business in the future.

Better access to financing

Accurate books:

• Builds credibility with lenders – lenders know that the information they receive can be relied upon to present an accurate picture of your business and can make credit decisions accordingly. Banking relationships are important, but credit committees are more interested in accurate financial information when making credit decisions.

Confident decision making that is timely

• The time spent looking for information is minimized – disorganized data undermines integrity and brings doubt into the decision.
• Opportunities can be met quickly and decisively – some decisions can’t wait. You either act or you don’t. Accurate data reduces the guesswork.
• Stress and uncertainty are reduced – again the more you know the less you are left to guess and hope. The decision can be made confidently and quickly.