4 Ways Consistency In Bookkeeping Helps Your Small Business
Consistency is an important aspect of accounting. In fact, it is a key principle of generally accepted accounting procedures (GAAP). But consistency is more than just an idea for accountants. It's a process that brings your small business many practical benefits. How so? Here are four of the most valuable things bookkeeping consistency will bring to your enterprise.
1. Consistency Allows You to Find Things
Need to find a vendor invoice or a customer receivable? Then invoices need to have been created, recorded, and organized the same way each time. Want to know what your insurance cost last quarter? You'll need to know which files or accounts to look under. If there is no consistency to these processes, business owners can rarely find the information they need — and never can find it quickly. However, having a dedicated professional who takes care of all of this makes consistency easier.
2. Consistency Speeds Up the Process
The more consistent your bookkeeping procedures are, the faster work can be done. Staff and bookkeepers don't have to reinvent the wheel each time they do a transaction. Incoming invoices can be processed quickly because they are all processed in the same way. There's no need to procrastinate the work and few decisions need to be made about how to handle the invoices as they come.
3. Consistency Makes Tasks Universal
Can only one member of your team do certain transactions? If so, creating a playbook for bookkeeping tasks allows more people to do them. For instance, when there is a written procedure for handling cash, anyone can do a customer transaction, store the cash, complete proof of payment, and enter the transaction. This frees up time for the whole team.
4. Consistency Shows Progress or Stagnation
Finally, consistency in how you do tasks means you can compare the past, present, and future with accuracy. When job costs are entered the same way over time, you can see if the same type of job is earning more or less profit since last year. And accurate financial statements show how cash flow has improved or gotten worse and whether the company is more or less leveraged than it was.
Where to Start
If your business could use more consistency, start by consulting with a bookkeeping service in your area. They will work with you and your staff to create processes and guidelines for everything from petty cash to filing taxes. Make an appointment today to get your small company on the right track for profit.