2023 saw a record-breaking 5.5 million new applications for businesses filed in the United States, breaking previous records held in 2020, 2021, and 2022. Post-pandemic small business growth has helped a lot of people turn the tragedy of unexpected job loss into a new passion and purpose. But with these exciting new ventures comes a whole new frontier for new entrepreneurs: bookkeeping. This side of business might seem less glamorous at first but is crucial to long-term success in business. With the ease of tax filing software and a wealth of information available online, bookkeeping is much easier for the average business owner than in times past but it’s still an element of business maintenance that gets away from busy leaders juggling multiple demands. Here are some of the many benefits of bookkeeping.

To start with the obvious, bookkeeping is pretty crucial come tax-time. The IRS requires you to keep receipts of everything and keep track of income, expenses, assets and more. Having a centralized place to store all of this information is pretty much the best use of technology since the microwave. Failing to file or filing incorrectly comes with serious penalties so it’s important to have accurate and in-depth bookkeeping for your business.

Tax filing is not the only reason to get started setting up your books. Having accurate and well-managed books also helps significantly with making financial decisions for your business and forecasting for the future. Whether you are deciding whether or not to take on additional employees or what assets to invest in for your company, you’ll want up-to-date and thorough data to help you make the best decision.

Forecasting is important for all businesses but it’s especially important for product-based retail businesses. Being able to see historical records of sales cycles helps you to know how much inventory to purchase and where you might need to scale back. Another important use of bookkeeping is to provide investors with important information should you decide to scale your company. Whether you are looking for an angel investor or a business loan, you’ll need to share your financial data in a readily-accessible way.

Small business owners already have a lot to be worried about – they are typically juggling multiple roles and making tough decisions everyday. Bookkeeping is just one of the many facets of running your own business to consider but it can have an outsized impact on the success of your business. Outsourcing your bookkeeping can be a great way to make sure your books are expertly managed and accurately updated, without the stress and hassle of trying to learn the ins and outs of accounting and software yourself. With the help of an accountant, you can also receive insight into financial trends, forecasting for the future and major financial decisions for your company. At ClarkSilva, we love to help passionate small business owners understand and optimize their finances through bookkeeping. Contact us today!