This article is a submission by D&V Philippines. D&V Philippines has years of experience in the accounting and finance industry. This third-party services company can provide you with the back-office support you need.
One of your main sources of financial information is your accounting books. You refer to them whenever you want to decide on which project to pursue, strategies to implement, budget allocation, and other important decisions to maximize the potential of your business.
Error-filled accounting books can lead to costly mistakes that may constrict your cash flow and limit your business’s long-term prospects.
It’s important to update your accounting books regularly. Doing so enables you to make real-time decisions based on current financial data. Regular updates also come with other benefits for your business.
9 advantages of having updated accounting books
Here’s why keeping your accounting books up-to-date is beneficial:
1. Keep records updated
Updating your accounting books regularly allows you to keep current records of transactions, financial reports, data, income statements, and others.
This makes it easier for your team to prepare the reports they need whenever they need to submit documents to your clients or your local government.
It also reduces the time spent preparing invoices and paperwork whenever you need to pay taxes and settle accounts payable to suppliers and partners.
Having updated records improves the efficiency of your accounting and bookkeeping processes.
2. Always have real-time financial data
When you decide on launching a campaign, establishing a budget, considering a new product, and other possibly profitable projects, you need to have real-time financial data.
Historical data from previous months or years is important, but situations may change in the present because of shifting consumer trends, external factors, high inflation, or interest rates.
In such cases, you’ll need real-time financial data to make important business decisions. Errors in your books may lead to costly and poor decisions.
Updated accounting books provide you with the latest information you need with no mistakes in them.
Ensure that only an experienced accountant updates your accounting books. Reliable accountants have the attention to detail that allows them to identify and correct mistakes immediately.
3. Streamline and comply with taxes
Non-compliance to tax payments incurs hefty fines and possible legal action. Businesses need to pay their taxes in full.
You need to record and submit financial documents so that you don’t get into trouble with your local government.
However, some companies delay their tax preparations until the last minute. This may lead to errors in your books and late payments.
This is when you must update your accounting books on a regular basis. Doing so allows you to have updated payments, collections, and reports. It allows you to prepare for tax payments and pay them early or on their due date.
Updated books also let you identify possible tax incentives you can use to reduce your costs.
4. Identify top-performing campaigns, products and/or services
Knowing if you’re using your resources effectively gives your business financial flexibility.
Updated books allow you to pinpoint which campaigns, products, services, and other projects have a positive impact on your bottom line. Directing more resources to profitable aspects of your business allows it to grow.
A higher growth rate opens new opportunities for company expansion. You can consider opening a new business in a different market while reducing risk.
It’s also possible to seek additional funding from lenders because of your higher growth rate. Additional resources provide you with the financial capability to develop new products or improve current ones.
5. Create and maintain a budget
Your accounting books provide you with an overview of your expenses, revenue, and cash flow. This information enables you to determine the budget you need to cover all sorts of costs you incur on a regular basis.
Regular updates also remind you of your current expenditures and if you’re still within your budget. This allows you to maximize resources and eliminate overspending.
6. Determine ways to cut costs
Updated books not only enable you to maintain a budget but also allow you to reduce business expenses.
The information you get from your books lets you determine which aspects of operations, sales, marketing, and others are inefficiently using resources. Once you identify these, you’ll know which costs you can do without.
This reduces your spending and provides you with financial flexibility to invest in campaigns, projects, and tasks that deliver profits.
7. Learn how to boost revenue
Your accounting books are a source of various financial information you need for the growth of your business. You can find data about your company’s revenue in them.
Updated books enable you to determine the revenue trajectory of your company. You can get insights into its upward or downward shift based on the financial reports and income statements you generate regularly.
You’ll be able to determine your main revenue streams. This allows you to create strategies that maximize the potential of your top-performing products and/or services.
8. Allocate your budget efficiently
Efficient budget allocation enables you to make full use of your resources. You can do this efficiently if you have updated accounting books.
The insights you gain and the data you analyze allow you to find ways to reduce spending without sacrificing the quality of your products, services, and the output of your employees.
It enables you to identify which aspects of your operations and which projects need proper funding to achieve the results you desire.
Efficient allocation of resources enables your company to achieve its growth goals.
9. Understand your financial position
Your company’s financial position is one of the factors that may determine its future. Update your accounting books so that you’ll always have an overview of the trajectory of your organization.
You’ll know if you’re financially capable of expanding your business without constricting your cash flow or putting your company in a poor position that may lead to its failure.
Updating your books provides you with insights and information about the profitability of your strategy or campaign. It can show you if it’s time to change course or keep going.
Outsourcing to keep your accounting books up-to-date
Updating your accounting books requires meticulous attention to detail. Inexperienced and unskilled employees cannot keep your accounting books updated with no mistakes.
They’ll have a difficult time identifying and correcting possible errors. Consider outsourcing to an experienced back-office team.
D&V Philippines can meet your requirements because of their years of experience in dealing with international clients who need their books updated.
Partner with D&V Philippines for your accounting needs
D&V Philippines has years of experience in the accounting and finance industry. This third-party provider can aid you with the back-office support you need.
Contact D&V Philippines to learn more about its featured services!