5 reasons why record keeping is critical for your business

Why record keeping is critical for your business

Keeping accurate and complying records is not only a legal responsibility of anyone carrying on a business, but is also vital for any business that wants to know their performance, therefore, you should give it the attention it requires.

With the increasing adoption of bank feeds and online accounting, many businesses believe that having the income/expense in the bank statement is enough to manage their business. Not only this is not compliant with the ATO but it will also limit your ability to keep score and obtain further details. Bank statements have very limited information and most of the time the system won’t pick up the full amount and hence you are missing a lot of details.

Here are 5 benefits to good record keeping in your business.

1. Get the maximum return from your business

If you are looking to get the maximum return from your business, you will need to look into the details (data). And for that, record keeping is key. Think about sports, the most successful teams are those who know their data. They can run reports on who is more efficient in what position and even down to the time of day the team or individual is more likely to perform at their best. This is the same for your business.

2. Know which products sell best

Being able to know your most efficient products, the time of day you sell the most, who are your best clients and what’s your best product. These are only one of the simplest examples that keeping good records will allow you to do.

3. Compare and identify trends

After keeping consistent records over a period of time you’d be able to compare and start identifying trends. These will help you highlight areas to focus on. You will also need to plan what are the initial details you are going to focus on. Start with a limited number of reports and as you develop and find the most important items you can keep moving towards developing a more complex dashboard.

4. Revolve disputes quickly

Other benefits that a good record keeping system will give you is the ability to resolve disputes quickly, avoid fraud or theft, keep an eye on your suppliers’ and prevent oversights. You’d be able to identify these and act quickly to keep your business on track.

5. Great software makes bookkeeping easier

Gathering all these details used to be time consuming and very tedious, but luckily, we now have software like Dext that will make it a breeze and give you the most accurate results. The key is in having a system that is accurate, reliable, and easy to follow, a system that will give you consistency and that is adaptable to your strategy.

If you need help on setting up a system or unsure what are the metrics you need to follow, contact your advisor today.