Bangladesh is a difficult environment for small businesses, particularly new ones. According to research, nearly 20% of business fail in their first year, and only about 50% make it to the fifth year.
However, an important question arises: "Is bookkeeping one of the causes of small business failure?"
Sometimes poor bookkeeping strategy causes small business failure. In this post, we will discuss various bookkeeping issues that a small-business owner may face. Also, provide solutions for them.
Without further hesitation, let's get started!
Poor Bookkeeping Causes Small Business Failure
Poor bookkeeping is most likely to harm your business in a variety of ways, regardless of whether it is profitable. Aside from lost opportunities, your company may incur additional operating costs or find itself in a legal situation. Knowing about bad accounting methods can assist you in making the right choice in order to avoid keeping inaccurate financial records. Ineffective bookkeeping can have an impact on a variety of factors:
Credit loss and interference
Incomplete sales and profits
Legal issues
Lost Opportunities
Limited Decision-Making Options
Types Of Bookkeeping Problems A Small Business May Face
The great news is that a large number of factors that cause of failure in small businesses can be avoided entirely. This is especially true when it comes to the accounting and financial aspects of the equation.
If you pay careful attention, you must be able to detect some of the red flags that your company is in trouble. A few red flags that you may be having bookkeeping issues are:
Failure to obtain bank financing
Accounting confirms that you are unable to cover payroll.
Failure to meet loan covenants
A lack of standardized, repeatable monthly closing procedures
Failure to complete monthly financial statements on time
Hearing excuses rather than receiving deliverables
How Common Bookkeeping Problems Solved?
Nobody wishes to wake up one day to discover that their company is on the edge of failure. This is a heartbreaking realization, made worse by the fact that there are protective steps you can take to avoid disaster.
Whether you already have a few signs of bookkeeping issues in your company or want to avoid them entirely, the following are some of the best options:
Technology: Many small businesses, both new and established, continue to monitor and control their finances with antiquated tools such as Excel.
Automation: There is no purpose because small businesses should not embrace technology today. It simplifies many tasks and eliminates them through automation.
Training: It would be shame to drop behind or perhaps even lose your company since your accounting team failed to stay current.
Outsourcing: It is one of the best ways to ensure bookkeeping excellence. This works especially well if you select a companion or professional with a greater skill level.
Did you know? - The worldwide accounting and bookkeeping technology market is expected to be worth $11,772 million by 2026.
Average Bookkeeping Service Cost In Bangladesh
Business Size
Average Cost / Per month
Startup business
15000 – 40000 BDT
Small business
40000 – 60000 BDT
Medium business
60000 – 200000 BDT
Large business
200000+ BDT
How Can Financial Bookkeeping Assist Your Business?
Bookkeeping will assist your company in identifying its strong and weak areas, that is, the areas that generate the most revenues and those that only add up to losses.
With such information available, business owners can work on cost-cutting techniques, pricing evaluations, and cutting staff as needed.
You need to know where you're going and how much fuel you'll need to get there; efficient bookkeeping ensures that you're generating enough cash to keep your business going.
It assists you in determining which product is boosting your sales as well as discovering market trends, which can be very useful in even were opportunities for business growth.
5 Tips To Get A Good Bookkeeping Service
Let’s get some valuable tips about bookkeeping from our experts:
1. Separate individual and commercial accounts
2. Use Cloud Accounting Software to Automate
3. Develop An Easy-to-Use Record-Keeping System
4. Set Important Deadlines Reminders
6. Understand Your Business Expenses
FAQs
1. What exactly does a bookkeeper do?
Ans: Bookkeepers are in charge of the effective setup and management of an organization's bookkeeping, which includes, but is not limited to, the effective setup of the chart of accounts and the recording of transactional data in an organized manner that corresponds to the relevant accounting and tax standards.
2. Can my bookkeeper as well as Accountant work together?
Ans: Yes, it is far preferable to hire a hybrid accountant who can handle both your bookkeeping and accounting needs, reducing the need for duplication of effort and communication errors.
3. What is the Value of Bookkeeping?
Ans: Effective bookkeeping can assist you in remaining compliant, making important decisions based on accurate data, and effectively tracking performance.
Bottom Line
We wish these bookkeeping statistical data have shown you that this job can be enjoyable—or at least not as bad as you think!
The key point to remember is that financial reporting should never be undervalued. Although some aspects of the job are routine, it is a dynamic one.
Bookkeeping is essential if you want to understand your company's financial solidity, so treat those guys with respect!
