For most people, the idea of starting up a business is somewhat akin to a blockbuster movie, where life finally pieces itself together and brings success on a platter to feast on.
When the idea of running a retail start-up or business comes to mind, people tend to fixate on the more widely discussed and publicized “news article-worthy” parts of the experience, such as coming up with effective marketing campaigns or excelling in the hard-hitting world of sales.
While marketing and sales are certainly important elements in the success equation, there’s one part of running a retail business that people shouldn’t overlook (but still unfortunately do): bookkeeping.
Why you need to stop overlooking bookkeeping
Admittedly, bookkeeping doesn’t exactly invigorate any start-up owner or business head the same way the idea of making money and becoming a household name does.
Regardless, it’s a vital function that easily makes or breaks any retail operation. No matter how small or big your business may be, there’s no denying that proper bookkeeping keeps your financial and record-keeping obstacles to a minimum… while failing to do so can just as easily blow everything up.
With a proper bookkeeping regimen, you’ll have every bit of information necessary to steer your business in the right direction. Your bookkeeping records serve as the foundation for smart business decisions.
Admittedly, leveraging your bookkeeping records for smart business decisions may be difficult at first. Still, getting everything right with your business’s bookkeeping should be at the top of your priority list, for the following reasons:
#1: Bookkeeping is vital for proper budgeting
Budgeting and bookkeeping go hand in hand, in that the absence of the latter severely hampers the effectiveness of the former.
Through proper bookkeeping, you’re able to obtain an accurate stream of data for monitoring your finances and identifying necessary budget revisions for the coming quarter. Bookkeeping, when done correctly, ensures that all your income, expenses, and pending transactions are taken into account before you make any significant investments or re-allot your financial resources. Once you finally have a stable, consistent bookkeeping process in place, it will be easy to make the most out of your budget and take your retail company to the next level, no matter how limited it may currently be.
#2: With bookkeeping, you’ll be able to see your business in a more objective light
As you dive deeper into the duties of a business owner, you run the risk of becoming less objective as you grow more invested in your retail operations. This can severely hamper your decision-making process, leading to bigger problems down the line.
However, implementing a tight bookkeeping routine can give you a much-needed dose of reality and objectivity on a consistent basis. Proper bookkeeping lays out the foundation for strict and focused business analysis. Not only will this show you how your business is really performing, but it will also help you see what’s working and what isn’t.
#3: If you’re looking to stay on track with your taxes, then bookkeeping is vital
Once a year, Canadian business owners find themselves facing the intense pressure and tight deadlines that come with the country’s notoriously high compliance obligations. By now, it has become a rather stressful hallmark of the Canadian tax return season—one that can be easily avoided with proper bookkeeping. It’s simple: consistent bookkeeping gives you a head start on organizing your financial records throughout the year, ensuring you don’t end up pulling insane work hours to get your finances in place when tax season comes around.
While not nearly as glamorous as coming up with ad campaigns or creating marketing material, bookkeeping is an essential practice that can save you from a tonne of headaches in the long run. By paying closer attention to your business’s numbers, you can meet its financial and organizational needs well enough to ensure smooth and profitable operations all year round.
Looking for a Toronto or Ottawa based accounting service? We’re the ones for you! As financial professionals, we provide accounting and bookkeeping services for retail businesses that need our expertise. Let us help you sort out your books today!
We understand running a small business is complicated. Your financials shouldn’t be. Take the guesswork out of the accounting and let us help you build your blueprint for success.
Contact us today for your free assessment to find out how Blueprint Accounting can support your business.