How Keeping Records Can Change Your Financial Lifeclrvw
Every business owner has strengths and weaknesses. Keeping thorough records isn’t every entrepreneur’s strongest attribute, but it’s worth taking the time to establish this habit. Keeping records can change your financial life, and it’s something that anyone can do.
It’s amazing how seeing your income and expenses on paper changes how you think about money and fosters a more disciplined approach to running your operation. Even if you aren’t the person doing the record keeping, you’ll still reap the following benefits if you designate someone else to do the job.
Here’s how keeping records can change your financial life…
You’ll Notice Where You’re Spending Unnecessarily
If you don’t keep records diligently, you might not be aware of those hidden blackholes where your money seems to disappear. By keeping track of your expenditures, you’ll be positioned to identify unnecessary spending and stop it in its tracks.
You’ll Prepare Yourself for Internal Revenue Service (IRS) Inspections
Your business’s records need to be available for inspection by the IRS at all times. Failing to keep adequate records puts you in an unnecessary bind. When you practice thorough bookkeeping, you’ll always know your house is in order if the IRS pays you a visit.
Preparing Tax Returns Will Become Much Easier
Preparing your tax returns is a major hassle when you don’t have good financial records. If you’re keeping close tabs on your finances and documenting on your profits and expenditures, you’re basically doing the heavy lifting of preparing your tax returns.
You’ll Think Twice Before Making Purchases
When you establish the habit of being mindful of every dollar you spend, you’ll think about purchases differently. You will start considering how each cent makes a difference when it comes to your bottom line.
You Could Discover Deductible Expenses
It’s surprising how many deductible expenses that business owners never take advantage of. When you keep thorough records, you’ll likely discover many expenses that you can deduct from your taxes.
Seeing Finances on Paper Helps Put Things in Perspective
Though you might have a good rough idea of your earnings and your spending, seeing things has a way of putting it all in perspective. When you review your prior month of incoming cash and outgoing expenses, you’ll notice patterns, identify strengths and notice any weaknesses you’d previously overlooked.
You’ll Empower Yourself to Take Control
Becoming more aware of your finances is an empowering habit. By raising your own awareness of your business’s income and spending, you’ll find that you gain more control as a business owner.
Keeping Records Can Change Your Financial Life, So Start Today
Are you curious where to begin? We suggest you start by setting up an income statement sheet, where you list your income and expenses. You can also start keeping records through a balance sheet, which will include assets, liabilities and your equity in the business for a designated period.
Contact Clear View Business Solutions to Position Your Business for Success
Strengthening your understanding of your income and expenses through record keeping is just one of many ways to become a better business owner. If you want to learn more about improving your business’s chances of success, contact Clear View Business Solutions to speak to our team about our services. Give us a call at (520) 544-0177.