Why Bookkeeping Matters
I heard a sad but interesting statistic the other day. Many - and I mean a LOT - of businesses were either unable to apply for, or were denied, a PPP loan for the simple reason that they did not have the bookkeeping reports needed to complete the application process.
We know that many small businesses may not keep actual software-based bookkeeping reports. Many just wait until they do their taxes and then hand their CPA a box of documents and receipts. Bookkeeping is not fluff, nor is it a luxury. It is a necessity. And from experience, I can tell you that it is also a stress reliever!
Let's talk about why this matters. First, let's focus on the PPP Loans. The PPP requirements shifted continually when they were first rolled out. The second round of loans became available and many didn't even realize they had added options for the self-employed. One of my clients thought she would be getting a few thousand dollars to cover payroll for her part-time employee since she qualified for round 2. To her surprise, she also qualified as a self-employed business and ended up with over $12,000 in a potentially forgivable loan to cover her income.
Her application process was simple - we had her bookkeeping and payroll reports within minutes because her books and payroll are continually up to date. Imagine qualifying for thousands of dollars that will cover your business payroll, only to find out that you can't pull your reports together fast enough. Or you just don't have reports to pull.
Now let's talk about why this matters beyond the PPP Loans. You are in business to make money. Let's be real here. Why do you want to make money? To live a good life, to provide employment for others: employees, contractors, and everyone else you touch with the dollars you spend? To support causes that mean a lot to you, spreading the impact you can have anywhere in the world? It's important to know where your money is going - it helps control your spending, and it's a great way to make sure you aren't accidentally spending too much. It's important to give every dollar a purpose. How can you do that if you don't know what is going in and coming out? It's important to know what you have available to pay you and to reinvest into your business. How can you do that without good bookkeeping?
The act of Bookkeeping is an important job, so why wait until tax time to "figure out" where you stand? Know without a doubt daily, weekly, and monthly, exactly where you and your business stand so that you can make smart and solid decisions. And you will find that the stress may lift, reports are a breeze, and tax time will no longer be something to dread!
We would love the opportunity to help you and your business. While we tend to the books, you can continue making magic in your business, as only you can!