Say you need to make a big decision about the future of your business. You're mulling the possibility of developing a new product, launching a marketing campaign or adding people to your staff. How do you know that now is the time to act?
You don't want to make a major commitment to your future without first making sure you can afford it.
No doubt, your decision will depend on where your company stands financially. You don't want to make a major commitment to your future without first making sure you can afford it. This means you need to have a comprehensive bookkeeping system in place that shows you how much money you have, what additional debts you can collect and where your company is heading long-term from a financial standpoint.
Tracking both accruals and cash payments
One of the trickier aspects of business bookkeeping is staying equally aware of two different types of transactions. According to the Department of Industry, Innovation and Science, you need both an accrual bookkeeping system and a cash one.
When you and a customer get on the phone and work out an agreement to make a sale, that means your business is accruing money, and you need to make a record of that. The next step in the process, though, is actually collecting the cash. Does your business keep track of both accruals and cash? If not, your approach may need an overhaul.
Having the most current information possible
Making decisions in business is all about being informed. And under no circumstances do you ever want to act on information that's outdated. If you approve a new hire for August but you're only looking at budget data from June, you run the risk of wasting money your company doesn't have.
This is why it's so crucial to stay on top of your accounting and financial services. It's highly recommended to review your bookkeeping process frequently, making sure your actual ledger and cash reserves align with what you've been budgeting for all along. If you find any surprising discrepancies, you should waste no time at all before addressing them.
Getting help with managing your finances
If managing your company's books proves to be too big a challenge to handle in house, you can always get help. At Ashfords, we have a team of bookkeepers in Dandenong who are happy to pitch in with running your business.
We use a cloud-based solution that gives your company easy access to clear, up-to-date business intelligence insights. Talk to us today about how our approach can take your organisation to the next level.