Timeliness: Don’t let delayed bookkeeping derail your company’s growth

At the end of the month, businesses scramble to get their books in order before they close for the month. And although most well-run companies send out bills on time, many may not keep their essential bookkeeping updated in the same way. While billing brings in the revenue, it isn’t the only important metric of your company’s financial wellbeing.

Does your company close out its books on time every month? Are you able to produce financial reports with timely data at a moment’s notice? If your accounting isn’t kept current, you won’t have the figures you need to help you make sound financial decisions. Your fellow leaders count on you to be able to produce accurate numbers quickly. If they make decisions based on incorrect or old data, it can cost your business dearly.

The high cost of inefficient accounting

If you don’t have a set time to close out the books every month, that can lead to sloppy accounting practices, missed payments and extra work to set it straight.

• Late books put your credit rating at risk. Late books can lead to late payments, which in turn, can damage the business’ credit rating. This can become an issue when you need to lease or buy office space or make needed upgrades to your existing space or equipment. Vendors who may have been burned by your company in the past may insist on payment up front rather than extending you credit. A poor track record on payment could even get your company’s future projects with vendors pushed to the back of the line.

• Messy bookkeeping creates operations problems. Whether it's missed tax deductions or delayed purchasing and arrival of the business-critical equipment and supplies, you could be putting your operations potentially at risk. Plus you may even miss the fact that you are overpaying for goods or services. The longer an error is repeated, the harder it is to correct.

Inefficient accounting and bookkeeping can lead to missed opportunities and can tarnish your company’s reputation. In some situations, the lack of timely accounting data can even lead management to make costly mistakes.

When does timely accounting and bookkeeping matter most?

When you need to act fast, you need financials at your fingertips. You don’t have time to sit down with accounting and try to pull together the numbers on the fly. A leading practice for bookkeeping is to keep your accounts up to date every day of the month. That enables you to respond quickly to information requests with confidence in your data.

But the need for timely bookkeeping is even more important to decision-making at a few key times:

• A sudden economic shock. Your book of business can be affected by an economic downturn, regulatory changes, or many other unpredictable factors. When the worst happens, your management team needs to gather information quickly to make consequential decisions. If your bookkeeping is lagging, you could end up making a quick decision based on bad data. Knowing the exact state of the company’s financial reserves, accounts receivable, accounts payable, and other financial obligations, is critical to good decision-making.

• New hires. Requests to add staff is often a positive sign about your business. But the decision to add to your payroll should be made based on an analysis of data that reflects current financial trends. This includes the trends in revenue, costs and income. If you rely on outdated financial data, what seems like a good decision could end up losing your business money.

• Expansion planning. When your business is ready to expand, you can’t move forward without clear and detailed financial data. This can inform everything from the marketing budget to the advisability of leasing more office space. You need up-to-the-minute financial reports, not only when you start planning an expansion but throughout the entire process. The ability to respond quickly to changes in revenue and profitability can help confirm that growth is built on a solid foundation.

You should manage the business side of your company wisely. Timely bookkeeping and financial reports are key to smart financial management. Sometimes it’s better to outsource processes like accounting and bookkeeping to experienced teams to set your business up for success. This is an even smarter choice if that outsourced team is using cloud technology and delivering you regular and intelligent financial reporting. You can focus on running your business, assured that accounting is being effectively managed.

Resources for keeping your financials up to date

There are a lot of bookkeeping solutions on the market but most are just software. Bookkeeping Connect, a PwC product, is backed by powerful software and the experienced accounting professionals at PwC. Bookkeeping Connect makes it easier for companies like yours to let someone they trust take accounting and bookkeeping off their hands while delivering intelligent financial insights to turbocharge their businesses.

Bookkeeping Connect closes the books for each month on the fifth day of the following month. That means you always know that your financials are clean, accurate, and on time. Rather than relying on staff, who may already be juggling too many tasks, Bookkeeping Connect automates your bookkeeping and accounting. That saves staff time and confirms that the books are closed on time, month in and month out.

Bookkeeping Connect closes the books for each month on the fifth day of the following month. That means you always know that your financials are clean, accurate, and on time. Letting Bookkeeping Connect handle your bookkeeping and accounting puts the data you need a click away. It gives you timely, accurate insights. It lightens the load on staff and makes reporting easy. We’d love to show you how it works—request your demo today!