Financial Record Keeping - Choosing Between Business Success and Failure

Dear Entrepreneur and Business owner,
 
How well do you keep records in your business?
 
Are your accounting books up-to-date and accurate?

 Let’s talk about financial records and how important they are in running

a successful business.

 
I was speaking with a young entrepreneur, sometime back.
 
I inquired about his photography start-up and the financial outlook based on his records.
 
“I don’t have any record, but everything is in my head. I know how much is coming in and who is yet to make a balance payment for the photo shoot.”
 
The young man beamed with a smile.
 
But for me, It was a grim revelation.
 
While I concede that an entrepreneur should know some financial records off the top of his head,  It is not the right place to archive everything.
 
I felt sad that this young entrepreneur was likely going to be statistics! He had a mindset common with failed businesses.
Alas, there are tons of entrepreneurs out there who pay little attention to record-keeping, especially in the area of finance.  

 

While this portends danger for the small business, poor record-keeping is no less risky for big players.
 
Be it is a self-employed operation or a conglomerate with offices across continents; you cannot afford to toy with your books. It could be the difference between success and failure. Winning or losing.
 
Many large organizations have paid the price for a weak accounting/record-keeping system.
 
It left loopholes for fraud and exposed them to other forms of impropriety.
 
So, keeping detailed accounting/financial records is super important.
 
Without proper bookkeeping, an accurate financial picture of your business will elude you.
 
No matter how big or small, you must work out a system to capture all your income and expenditures.
 

What are the tools available in 2020 for doing that?

In today’s technology-driven business environment, there are tons of tools to help you.
 
With many of them tailored for different levels of users. Big, Medium, or small.
 
From high priced accounting packages to application programs that are free to download.
 
A simple Google search will give you a plethora of options.
 
And in the absence of devices like the Personal Computer, Laptop, Tablet, or Smart Phone, you still have a choice. The old and ever-reliable ledger with its hardcover!
 
With a pen and paper, you can record every income, expenditure, or transaction.
 

Will financial records protect me from fraud?

Nope, it may not.  But it could harden the chances of people stealing from your business.
 
But note that a good record system does not imply that no one will try to cheat you.
 
Or that you will not suffer any financial loss in the course of running a business.
 
What it means is that you must have a hands-on approach in managing your business.
 
Keep a close eye on the books, both the inflow and outflow.
 
Do not interpret this as a lack of trust for your team members, employees, or partners.
 
Whether you are self-employed or run a large corporation, you have a duty to keep a tab on the finances.
      
The decision to maintain financial records and accurate books could be the clincher between success and failure. Winning and losing.

How do you handle your financial records/bookkeeping?

 
What digital tools (Accounting software/Applications)do you use?
 
Any tips for other entrepreneurs and small businesses?
 
Please share your story and let us all learn from one another.
 
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