Why Do we Need Monthly Bookkeeping?
As a small business owner, you shouldn’t overlook the importance of your monthly bookkeeping. After all, it’s one of those things that can save you a great deal of time, money, and headaches down the road. Without keeping clean and accurate books, your business is likely to face financial chaos - think about it.. How are you supposed to measure performance if you don’t have clean numbers?! Here are several of the many reasons we think you should make it a priority...
Review Payroll
Your employees are likely the backbone of your business - they sure are for ours. Monthly bookkeeping ensures payroll remains accurate and compliant by allowing you to:
- Verify Accuracy: Ensure employees are paid the correct amount every cycle.
- Maintain Compliance: Confirm that the correct amount of taxes are being withheld.
- Manage PTO: Monitor PTO accrual balances to prevent them from becoming a large unmanaged liability.
Keep Track of Customer Bills and Payments
Customer bills and payments allow your business to collect the cash on the services performed. While you should send out bills right after your customers receive products or services - or even before in some scenarios - it’s wise for your bookkeeper to review those at least collections once a month. There’s no easier way to grow your business than to make sure you’re collecting the payments on the services already rendered. Revenue is great, but cash is even better.
Handle Vendor Billings and Payments
You should also handle vendor bills and payments quickly. Since some of them may slip through the cracks, a monthly review by your bookkeeper is a good idea. They can ensure all of your vendors have been paid in a timely manner and take care of any bills that may have been overlooked. And even if you can’t pay them that month, at least this exercise allows your Accounts Payable listings to be accurate so you know where you stand. With monthly bookkeeping, you’ll be working towards continuously maintaining a healthy relationship with your vendors. After all, you probably wouldn’t have a business without them!
Simplify Taxes
Taxes can be complicated and overwhelming. With monthly bookkeeping, however, you can make life easier come tax time. You’ll have an organized, accurate record of your income. It’s much easier, and cheaper, to keep up with this stuff along the way, versus trying to do it all within a week before taxes are due. We know your CPA can do it at the end of the year, but you will also be paying for that expediting.
Understand Your Cash Flow
This is our favorite one. Cash flow refers to the money that flows in and out of your business. With monthly bookkeeping, you can understand where your cash is coming and going, as well as the specific timing of those cash flows. While over an extended duration your business may have done well, if these flows aren’t understood on a monthly/weekly basis, you may be missing some cash shortfalls.
Interested in Monthly Bookkeeping Services? Contact GrowthLab Today
At GrowthLab, we help small businesses like yours succeed. You can trust us to handle your books on a monthly basis and make recommendations on how you can use it to increase your revenue and meet (or even exceed) your business goals. Contact us at 888.673.8481 for more information!
Frequently Asked Questions
Why is monthly bookkeeping important for small businesses?
Monthly bookkeeping keeps your financial records accurate, organized, and up to date. It helps business owners understand performance, manage cash flow, avoid costly mistakes, and make informed financial decisions.
How does monthly bookkeeping help manage payroll?
Monthly bookkeeping ensures payroll is accurate, taxes are properly withheld, and PTO accruals are tracked correctly. This helps maintain compliance, avoid errors, and keep employees satisfied.
Can monthly bookkeeping simplify tax preparation?
Yes. Consistent bookkeeping creates organized financial records throughout the year, making tax filing faster, easier, and more cost-effective while reducing stress at tax time.
How does bookkeeping help manage vendor payments?
Monthly bookkeeping helps track vendor bills, avoid missed payments, maintain accurate accounts payable records, and build strong vendor relationships by ensuring timely and reliable payments.
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