Common Bookkeeping and Accounting Myths – Part III

Myth: It Takes Too Much Time to Set Goals: No it doesn’t. If you want to be successful, you have to set goals and then track your progress against those goals. Any company you have ever known, read about, or been involved in has used goal-setting as an important part of running their business. No matter the industry your business is in, things change. And while change can be a great thing if it presents you with opportunities of which you can take advantage, change can also kill your company if do not stay up-to-date with trends, technology, and consumer information. The way to do this is by setting goals.

It’s really simple and no it won’t take a long time to complete. Just write down ten goals for yourself and your company. If necessary, and if you have one, gather your management team and put this goal list together. In this way you will get input from all areas of the company, (e.g., sales, marketing, development, shipping, etc.) so nothing will get overlooked. Once you have finished this list of goals, set them in priority order from highest to lowest. At this point you need to attach financial numbers to each of the goals. This is critical, because by doing this you can develop the first steps towards your financial plans for the future. It would be wise to include your accountant as this point as

Well. He or she will have the knowledge and insight into your business’ financial health and should be able to make suggestions about things you may need to adjust financially to meet your goals.

Myth: I Don’t Need Bookkeeping to Know How My Business is Doing: We would hope that if you have been reading this blog series that by now you would read this myth and respond, “Well of course, I know THAT isn’t true”. If not, let’s look at some basics:

First, if you are busy, this does not mean that your business is doing well. You need financial reports to tell you if you are bringing in more money from your business than you are spending on it.

Second, you also need these financial reports to show problem areas in your business, such as; thefts, loss, waste, etc. Without this information you will not know which areas of your business are losing, or costing you more money than they should, and you will not know that they need to be addressed.

Third, financial reports will also show you the areas in which your business is doing well. This can be anything from increased sales to revenues, to increased profits – and no, sales, revenues and profits are not interchangeable terms for the same thing. There are very clear differences between the three terms. But as we just mentioned above, if you don’t the areas in which your company is doing well, how are you going to know what things you want to keep doing, and perhaps increase doing as they help your bottom line?

It’s no myth. You need bookkeeping and you need the help from an accountant to get your business on a strong financial footing and keep it there so you can continue to grow it and prosper.

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