The Importance of Proper Record Keeping in Small Business

As a small business leader, you have the chance to make a big difference in your community. In provinces all throughout Canada, small ventures contribute thousands of new jobs every year.

Achieving the revenue you need to build your team and enjoy financial freedom for yourself has one important flip side: Making sure you have the right documentation to track your finances.

Record keeping is one of the most crucial aspects of moving your business in the right direction.

Of course, the process of keeping good records is intimidating to many people!

Because it can be time-consuming, it’s easy for it to fall down your priority list. However, integrating it into your regular business processes will keep it from becoming a hassle or emergency down the line.

Let’s consider some of the reasons record keeping is essential:

1. Getting a Small Business Loan

A business loan can be a terrific way to grow your operations, invest in capital, or promote your offerings. No matter if you choose a conventional bank loan or alternative funding you will need to show current profit and loss. A written business case outlining the required funds and anticipated spending can also help – all things that are best prepared well in advance.

2. Tracking Progress Toward Goals

It’s true of any goal: If you don’t know where you’re going, you won’t know when you get there! There are plenty of performance metrics you can track to understand your business, but your financial health is the most crucial of all. Consistently tracking sales and revenue against expenses will allow you to focus your attention on the most lucrative areas of your work.

3. Managing Taxes and Expenses

Tax time will be here before you know it. Maintaining good records will allow you to get it all in order and reach peace of mind more easily. It also becomes much easier to find opportunities to save money during tax season and all year around. You might notice expenses that you can curb or investments that could have a positive bearing on your tax outlook.

The opportunity to get an infusion of cash at the right time through a business loan can be transformative for many enterprises. Starting early with good records is vital. Engaging outside expertise gives you the benefits while allowing you to stay focused on what you do best.