Whenever we hear about SMEs, one thing that strikes the mind is that it turns out to be a growing ground and holds financial insecurity. It is assumed that business growth is limited and does minimal business operations. However, it stands intact that the SMEs are slow-growing entities at the initial start. There stands a scenario wherein business owners of SMEs are not exposed to the exact business requirements, and since they are not aware of the techniques, the business entity tends to fail. One such essential element is bookkeeping and accountancy practices that need to be followed. Now you must be wondering how? Well, this guide has all the answers did for you.
Accounting and Bookkeeping for Business for SMEs
The concept of accounting and bookkeeping has been implemented by every business organisation irrespective of business nature and its size. If you are dealing with an SME, then focus on the below-mentioned points as to why your business needs accounting and bookkeeping.
1. Structure of the Business Process
Managing entire business transactions might turn out to be a tedious job. You might end-up deal with numerous business transactions with your creditors and debtors. Implementing the accounting and bookkeeping process in your organisation will help you to stay organized. You will get a clear idea regarding the utilization of your finances. Moreover, business records will stand organized effectively.
2. Transaction Recording is a Mandate
Every transaction or deal that you will be doing adds value to your organization. Be it for a minimal or a maximum amount; such transactions are to be recorded at every point regularly. Bookkeeping deals with the recording of business transactions and implementing the same in your business is a wise decision. In any case, if you fail to record the business transactions, it might end up mismatching the final records, and your company might face severe consequences.
3. Easy Filing of Returns
Tax filing is one of the crucial phases for business entities, wherein proper information regarding the import and export needs to be penned. To initiate your tax filing on the goods supplied, it becomes important that your business books are properly recorded.
4. Leverage the Business Growth Opportunities
One of the core reasons for implementing the accounting procedures in your organization is that it will enhance the business growth opportunities. By preparing the book of records, you will have a solid base to compare the company’s performance, and by doing so, you can figure out the relevant growth opportunities and strategies for your business.
5. Rectify the Errors
There will be numerous times when you will end up recording multiple transactions at one go. Such scenarios end up increasing the probability of committing errors to a great extent. If they are not figured out during a specific period, your business will end up dealing with wrong numbers. Moreover, the presence of wrong figures will stand as a hurdle during the company expansion process.
6. Keep a Proper Hold on the Company Finance
By analysing the bookkeeping records, you will get a clear idea regarding the financial position of your business. This analysis will help you to keep control of the company finance and even help you to expand your business.
7. Follow the Footsteps of Established Companies
Many business owners end up having the wrong notion that only established entities widely use practices like accounting. If you are dealing with a small business entity, it is to be noted that by implementing such steps in your organization helps you to grow and follow the practices that would be profitable for your organization at a later stage.
8. Effective Cost-Cutting
The moment you analyse the bookkeeping records, you will be able to get a clear view regarding the business expenses that are incurred unnecessarily. Noting such insights will help you to reduce the unwanted costs which will successfully help you to leverage profit.
All the above-stated points will help your small-scale business to come into the larger picture and to establish a mark in the competitive ground. Since now you are well-versed with the core reasons as to why one should implement the accounting process, there are other processes like Audit, Tax, which needs to be taken care of at the initial phase itself. it is to be kept in mind that carrying out these processes in a professional way ends up bringing accurate results. The way subject-matter experts understand your business, an in-house team can’t perform the activities in the same way. Wondering whom to have a word with? or how to start with? Don’t worry!
JAXA Chartered Accountant is here to help you. Our accounting and bookkeeping experts are here to understand your business needs and cater them accordingly. Providing tailored solutions is one of our KPIs, which makes us stand as one of the top ten accounting firms in Dubai. Since inception, we have helped multiple clients to strengthen their accounting and bookkeeping base that has leveraged their business growth. If you have any query or want to talk to our experts, do contact us today-we’d be glad to assist.