Bookkeeping
AN INTRODUCTION TO BOOKKEEPING
Is bookkeeping that important?
In one word, yes it is!
A good bookkeeper will prepare meaningful reporting for your business, investments or personal affairs on a regular basis. This is important so that you know what you have achieved, where you stand today, precisely and can plan for where you want to go and how to achieve those goals.
A good bookkeeper will help you understand your cash flow, your needs and explain where your money is, where is the profit you made if not in the bank and what you need to meet your expenses each week and month.
A good bookkeeper will help you plan for the future and understand the past. Know how to steer the business to pay wages on time, your taxes when they are due, as well as loans to the bank and all your suppliers. They can help to recover your outstanding debts and give you the information to make vital business decisions.
It is imperative that bookkeeping is accurate and up to date, that you can rely on the information and that your accountant can also rely on the information and prepare the year end reporting quickly and easily, in a timely manner as basically every business decision hangs on this.
A good bookkeeping will not only record that data, but explain the reports to you and help guide you to make improvements. This is not only important for businesses but also for investors and any one serious about managing their household budget well.
Robert Kiyosaki, author of the Rich Dad, Poor Dad books, talks about the importance of having a bookkeeper for your household, not just for the self-employed person. He understands and highly recommends everyone hire a bookkeeper.
I personally love managing my cash flow and update my spreadsheets managing income and expenses, investments in shares and property and assessing my current position on a daily basis. I do this in my free time, every evening, after doing this work for clients all day as part of my day job.
It gives me great satisfaction to know I can pay all my bills as and when they become due and know exactly what I can afford to invest, when and how much, prioritising such things before giving myself a budget to spend money on other more frivolous things.
At any point in time, I know how much is in my purse, how much is in each account, when each bill is due and how much that bill is, how much is owing on my credit card and that I can pay it off in full, any time – and do pay it off in full every month. I know what my shares are worth at the close of trading each day and when each of my tenants have transferred their rent for the month. I know their payment habits and which ones I might need to remind, not because they don’t have the money to pay the rent, but because they simply forget.
I know how much money is coming in and how much is going out. I want you to have the same level of knowledge and confidence around your money and investments. I want this for everyone.