Keeping score is key to the survival and success of your business

 

Bad record-keeping is really bad for business.

 

As a small business owner, it is important to stay focused on the basics of business success. One of the most fundamental components of achieving business success is keeping good financial records. The importance of keeping good financial records cannot be overstated.

Imagine watching a rugby or cricket match and only being told after the game what the score was. Sound absurd? Yet I regularly encounter businesses with poor or inadequate accounting records. It comes as no surprise that these businesses are generally not as profitable as they should be.

Good accounting records are important:

  • at tax time;
  • if you need to get a loan; 
  • if you want to adequately monitor your business performance; 
  • if you ever want to sell your business;
  • and to keep track of where you money is going, when, and how. 

Maintaining accurate and reliable accounting records are a legal requirement of running a business.

Studies have shown that as many as 1 in 6 small businesses fail due to poor record-keeping alone.

You must develop good record-keeping habits from the inception of your business. If you start off with bad habits it is much more difficult to clean up after yourself at a later date than it is to start with a system in place that can help you quickly and easily keep track of your business finances.

Read the full feature in the February issue of Plumbing Africa, page 20.

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