The Power of Daily Bookkeeping for a Small Business Owner: Why it's the Future (if You Want to Grow Your Business)
If you are running a small business and want to grow it, then bookkeeping is one of the most important things that you can do. It's not just about balancing your books at the end of the year, but keeping track of all transactions in real-time so that you can make better decisions for your company. Simply put: if you don't know where your money is going, how are you supposed to know what direction it should be going? Where you're a florist, bar manager, store owner, or just a person that wants to become a small business owner, read this article to find out more.
In this article, we're going to show you the value of daily bookkeeping.
We’re going to show you how daily bookkeeping can be a simple and painless way to guarantee the data going into your accounts software is accurate and up-to-date.
More than that, we’ll show you how it’s the key to helping you keep more cash in your account, avoid running out of money, and feeling pretty damn confident you’ve got your numbers sorted.
At the very least, we’ll show you how to enjoy a future without the cash flow rollercoaster most businesses accept.
We don't want that for you.
You deserve more.
Like being able to take control and grow your business.
And it all starts with daily bookkeeping.
Now it’s not hard or difficult but you probably haven’t considered doing it until now because well… no one said it could be done.
Why data matters to a small business owner
You see when business owners start using Flow or Predict they tell us:
"WOW, I didn't realize how many errors there were with my numbers or how much was missing…"
When you know you've made a sale or received a payment and you can't see it on your dashboard, something is wrong.
You realize how often you made important decisions based on incorrect information.
Sure, a few mistakes or omissions here and there don’t seem like a big deal.
But here's the bigger problem.
Your business could end up in trouble when you don't have all the relevant information to hand. Getting the full picture is essential when making major future-affecting decisions.
Without the full picture, you end up with surprises.
And the thing about being in business is that surprises are always nasty.
You know what we mean.
The kind of gut-wrenching surprises like an unexpectedly large VAT bill or running out of cash a week before payroll.
When you have accurate forecasts, you say goodbye to surprises. You take control rather than be controlled by events.
Businesses that consistently make errors with their data and base decisions upon incomplete data end up blindsided by events. Like many cash flow crises, you usually realize you’re about to run out of cash when it's too late to respond.
You can draw a direct line between accurate, up-to-date data and making better decisions for your business.
When you fix this aspect of your finances, you minimize the risk of data issues impacting the future of your business.
If you're already using data capture software, like Dext, you're already minimizing the risk.
If you're not, you can improve data accuracy by automating as many points in your accounting process as possible. Check every point from data entry through to building predictions.
The ONE big weakness in your accounting process
There is only ONE weak point that remains a manual process: bank reconciliation.
That's the task of matching your bank feed to your transactions in Xero or QuickBooks.
While everything with this process can - and should - be handed off to our robot overlords, there's still a need to check and confirm each transaction manually.
And that's usually the job of your bookkeeper.
The problem is two-fold:
First, there's always the worry of human error. Even if your bookkeeper is sh**h*t, human error is still a possibility. (They are only a person!)
Second, if you're making daily sales or purchases and you're only reconciling weekly, you're forever behind.
Month-end or weekend bank reconciliation leaves you on the back foot.
And there's a simple answer to the problem: daily bookkeeping.
Have a conversation with your bookkeeper or accountant about how to move to daily bookkeeping. Or do it yourself.
"What?!" we hear you scream. "I've so many other things to do. Should I really be adding daily bookkeeping to my To-Do list?"
The reality is that for most businesses, this only means a few transactions each day. It will take minutes. It’s so simple with Xero and QuickBooks.
You - or your bookkeeper - won’t spend any more time each month reconciling the account. You're just spreading the time over the period. And this has benefits.
Instead of looking back over a whole week's or - worse - an entire month's worth of unreconciled transactions, it's easier to identify the purchase you made the day before or how a software subscription should be properly coded.
Leaving it a full 30 days before being asked by your bookkeeper to try and remember what purchases were for, results in inevitable mistakes and inaccuracies.
So, let's not do that anymore, ok?
If you're already checking Futrli Flow and Predict daily to keep more cash in your account and plan your growth, adding daily bank rec is another few minutes to add to the process.
It's a small cost but the payoff is you’ll feel like you're totes in control of your finances, again.
As we've argued, when you ensure your data is accurate and up-to-date, your forecasts and predictions give you the full picture. From this, you make better decisions, such as improving cash flow and growth.
If you're serious about growing your business, get started with the daily bookkeeping habit or speak to your accountant or bookkeeper about shifting to a daily rhythm.
Many of the accountants we work with offer daily bookkeeping services to their clients.
If you're an accountant, use our resources and videos right here to help upskill and empower your clients to take control.