Record keeping is the process of recording transactions and events in an accounting system.
Record keeping is very important in a startup business as it helps the company in the following ways;
- PREVENT FRAUD OR THEFT.
Having a fraud prevention process by keeping detailed records of your business expenses and transactions is essential for your company.be it as a startup or large enterprise. Having an overview of your cash flow can allow you to understand how much cash is coming in and out of your business and produce an accurate financial statement for accounting and auditing purposes.
- MANAGE YOUR CASH FLOW
Cash is king when it comes to financials management of a growing company.as evidently portrayed through covid-19, maintaining a healthy cash flow that can sustain against pandemics and other unforeseen circumstances is very important if you want your company to survive in the long run.
This where record keeping now comes in as it helps’ you to identify and understand where your francs are in and going out from and have an accurate projection of the health of your company’s finances.
- PAY YOUR TAXES
With documentation and good record keeping practices, you can pay your taxes accurately, on time and save on penalties.as a startup business every franc counts and it is important to stay prudent on such financial matters.
- MAKE BUSINESS DECISIONS
Every franc within a startup is very precious and should be well spent. Understanding where your money is coming from and heading is very crucial in helping you better understand and make data driven business decisions. As startup owner, you would want to save as much time and money as possible and focus on other important business task to drive profitability and growth
- SAVE TIME AND COSTS
When you need to file reports and conduct financial year end closing, a good record keeping system can allow you to save time and money as you do not have to panic and go through last minute rush to meet deadlines or hire someone last minute to handle it.
- PREVENT LOOPHOLES AND OVERSIGHT
Record keeping can help to justify and explain why the company management made certain decisions .cash flow problems are also found to be one of the leading causes of failure for businesses and having consolidating records will enable businesses to make better decisions.