Bookkeeping affects the profitability and Key Performance Indicator (KPI) in a business. Bookkeeping will make you aware of the important things that are needed by the business to grow. You will find out the cost of production, labor costs, indirect costs, many products produced, many products sold, which products produce the highest sales and which are not as well as other details. By tracking these things in the general ledger, you will easily measure the profitability of each product. By knowing how much money is flowing in each transaction, you can accurately measure your business area. This is exactly why new business owners tend to hire a skillful Bookkeeper.
In addition, bookkeeping can also facilitate tax payments. Late paying taxes and not complying with applicable regulations will result in large fines and penalties. Not to mention the frustration that is felt so that it disrupts your focus. Of course, this will hamper business growth. If your books are neatly arranged, detailed, accurate and up to date, then problems like this will not pass right in front of you. You can calculate tax payments quickly and accurately making it easier in the reporting process.
One more thing that cannot be avoided by businesses that have grown is the audit process. Similar to tax reporting, this process can also result in penalties if there is a discrepancy between the data and those in the field. Accurate and up-to-date bookkeeping will reduce the pressure from the audit process. It’s because if the data presented is incomplete, it requires a very long time to collect these data. Your time that can be used to develop business will be taken up.
In addition, bookkeeping can affect business organizations better. How is a business? This question is often asked by people to business owners. And this question is a scourge if the business they are doing is not going well. By maintaining accurate books and records, you will feel confident and able to answer this question when it comes. This is because you are able to understand your business well, and really grow because it is managed properly.