4 Reasons You Shouldn't Neglect Your Financial Records Amid a Pandemic
We’re still battling a global pandemic, and despite the current progress in beating the virus, many business owners are still struggling to survive. One of the things that can go easily unnoticed at a time like this are your financial books. Not paying enough attention to your books at a time of crisis may be the last thing on your mind, but it could be detrimental to your business even more.
1. It’s a Legal Obligation
As a business owner, you have several legal obligations, and most of them don’t change amid a crisis. Keeping your financial records up-to-date is one of them. For example, if you’re a limited company, you need to provide company information like memorandum of association, articles and many more.
2. It Will Help You Survive
Being in survival mode in the world of business is challenging, but keeping records and ensuring they’re up-to-date are crucial. You still want to grow and improve, and these are things you need to survive during a global pandemic; therefore, your records will allow you to see the right targets and track your progress.
Your costs, revenues, and profits are critical financial information to help you survive at this time.
3. It Allows You to See Your Accurate Financial Records
If you don’t have good records, then it will be difficult to prepare accurate financial statements. Your financial statements will help you in the decision-making process to better manage your business. Gathering and recording ongoing information about your business activities will help ensure you have all the details you need to support your decisions, even the ones you have made over the years.
At this time, you may need to make big, important decisions for your business. When you don’t have accurate information to do that, then you could end up with wrong decisions that can even put your business at a higher risk.
The records you need that can influence your decisions are:
Profit & Loss
Cash flow statements
Payroll processing reports
Keep in mind, the records you need still vary depending on the size of your business and the industry you’re in. These reports are not helpful for your business, but it’s also necessary for banks and lenders.
4. It’s for Business Assets
Aside from the ongoing transactions your business goes through every day, you need to keep detailed information about your business assets. These assets can be your equipment, furniture, bank accounts, and many more.
When you keep good financial records, you get a clearer view of your assets, which can be helpful for you to survive during these trying times.
The last thing you should do during a difficult time for your business is to forget about your financial records. Now is the time to pay close attention to them and ensure you’re managing your books well. By doing so, it will help you through and even help you survive this crisis. If you have too much on your plate, your accountant or bookkeeper can do it for you!
Get an accountant on the Gold Coast to help keep track of your financial records. Here at New Wave Accounting, we can help you out with that. Contact us today to learn how we can help your business!