Quick Answer

Bookkeeping is important because it helps you know what’s actually happening with your business money. It keeps track of what you’re bringing in, what you’re spending, and where your money is going.

Without accurate bookkeeping, it’s easy to think your business is doing better or worse than it really is. AZ Easy CPA provides bookkeeping and CPA services in Chandler, Arizona and beyond to help small business owners keep their financial records organized and understand their numbers.

What Can Bookkeeping Tell Me About My Business?

Good bookkeeping gives you a clearer picture of how your business is doing. Looking at your bank account tells you how much money you have available right now, but it doesn’t tell you the whole story.

Your bookkeeping can help you see:

• How much money your business brought in
• How much money the business spent
• Where you’re spending your money
• Which expenses are getting higher
• Whether the business is making money
• How this month compares with previous months
• Whether something in your finances doesn’t look right

Having this information makes it much easier to understand what’s happening instead of relying on your bank balance or your best guess.

How Does Bookkeeping Help Me Make Business Decisions?

Most business decisions eventually involve money. You may be thinking about hiring someone, buying equipment, spending more on advertising, moving into a larger space, or making another investment in the business.

Accurate bookkeeping gives you real information to look at before making those decisions. You can see what the business has been bringing in, what you’re already spending, and whether you have room for another expense.

It doesn’t mean your bookkeeping makes the decision for you. It simply gives you better information to use when making the decision. If you need additional help understanding the numbers, your CPA can also work with the financial information from your books.

What Happens If I Don’t Keep Up With My Bookkeeping?

Bookkeeping is easy to put off when you’re busy running a business. A few weeks can turn into a few months, and eventually you may have hundreds of transactions that haven’t been properly organized.

When your bookkeeping is behind, it can be difficult to know whether the numbers you’re looking at are right. You may have expenses in the wrong categories, missing transactions, duplicate transactions, or bank and credit card accounts that haven’t been checked against your records.

The longer you wait, the harder it can also be to remember what older transactions were for. Keeping up with bookkeeping regularly can prevent a small amount of work from turning into a much larger clean-up project later.

Does QuickBooks Take Care of My Bookkeeping for Me?

QuickBooks can make bookkeeping easier, but it doesn’t completely take care of it for you.

QuickBooks can connect to your bank accounts, bring in transactions, and create reports. Someone still needs to review the information and make sure it’s correct.

For example, QuickBooks may bring in a $300 transaction, but it may not know exactly what you purchased or where that expense belongs. If transactions aren’t recorded correctly, the reports you look at may not give you an accurate picture of your business.

Good bookkeeping helps make sure the information inside QuickBooks actually makes sense.

Why Does Good Bookkeeping Matter to My CPA?

Your CPA uses financial information to help answer questions about your business and provide accounting services. If your bookkeeping is incomplete or incorrect, the information your CPA is working with may not tell the full story.

Keeping your books current gives your CPA cleaner and more organized information to work with. It can also save everyone from having to go back through months of old transactions trying to figure out what happened.

Some businesses choose a CPA firm that also provides bookkeeping so their regular books and other accounting needs can be handled in one place.

Frequently Asked Questions

Does every small business need bookkeeping?

Yes, every business needs some way to keep track of its financial activity. That doesn’t necessarily mean you have to hire a bookkeeper. Some business owners handle it themselves, while others prefer professional bookkeeping.

How often should I update my bookkeeping?

Monthly bookkeeping is common for small businesses. If you have a lot of transactions, you may want your books updated more often.

How do I know if my bookkeeping is right?

One important step is making sure the information in your books matches your actual bank and credit card statements. If things don’t match or you’re unsure how transactions were recorded, it may be worth having someone review your books.

Can someone fix my bookkeeping if I’m already behind?

Yes. Bookkeeping clean-up or catch-up services can help organize older transactions, fix mistakes, check accounts, and bring your books up to date.

Is bookkeeping only important for taxes?

No. Bookkeeping is useful throughout the entire year. It helps you understand what you’re earning, what you’re spending, and how your business is doing financially.

Looking for Bookkeeping or a CPA in Chandler, Arizona?

AZ Easy CPA provides bookkeeping and CPA services in Chandler, Arizona and beyond. If your books are behind, you’re unsure whether your numbers are right, or you simply want someone else to keep everything organized, reach out to Chris at AZ Easy CPA.

Chris can look at where things stand, answer your questions in plain English, and help you figure out what bookkeeping support makes sense for your business.