Bookkeeping is a process that refers to the activities of organizing and storing business financial and accounting documents, including ledgers, journals, financial statements, income tax records, and more. Bookkeeping is not only sufficiently emphasized when the company has been large-scale but also needs to be applied to the company when it is still small-scale so as not to be dragged down by the failure to know financial problems properly and avoid miscalculating the amount of Tax Services that must be paid. With good bookkeeping from the start of the business, a small business that is developing will know and have a healthy financial strength. Below are a few reasons why bookkeeping is important for the success and development of small businesses.
Improve Financial Analysis & Management
We all know that cash flow management is not an easy task. Proper bookkeeping allows you to analyze and manage cash flow so that you can see a more accurate picture of your business’s financial situation. Proper bookkeeping also helps you keep paying invoices to vendors in a timely manner. In addition, through good bookkeeping, you will always know exactly where your money has been spent.
Get Potential for Tax Reduction
Slow and inconsistent accounting can easily lead to the loss of potential legal tax deductions. The auditor can prohibit your tax deduction based on missing documents, which may not have been recorded in the books, making tracking difficult. You must keep your receipts and invoices for at least 6 years. If not, the tax auditor has the right to refuse the deduction that you submitted. From here bookkeeping is considered important to record all income and expenses so as to facilitate tracking of proof of transactions and nominal tax deduction that may be acceptable to the company.
You as a business owner certainly do not want your valuable time lost due to incomplete financial bookkeeping problems and receive a notification letter from the Directorate General of Taxes stating that you must undergo an audit. Streamline your time by recording all transactions (income and expenses) directly through our website.