16 May Why Investing In Bookkeeping Is Like Buying The Roadmap To Your Success
Close your eyes and picture your last road trip. Did you jump in the car and wing it? Or did you think ahead about some of the details, like how much gas you’d need for the journey, where you wanted to stop for lunch, et cetera? Chances are you’ve tossed those good old Rand McNally paper maps in favor of the Google Maps app, but you’re still plotting starting and finishing points with notable stops along the way.
Sure, you may be able to get there without a map, but you’ll likely lose quite a bit more time and energy. While it may sound cliche, every journey that successfully reaches the desired destination begins with a roadmap.
The same can be said for mapping out your path to business success. To know where you’re going and how to get there, you have to know where you’ve come from, where you currently are and what milestones you need to reach to achieve your goal. You need to know what has worked and what hasn’t, and exactly where you are trying to go. Bookkeeping provides that roadmap to your business success.
Where You’ve Been
When people think about bookkeeping, they typically think of it as a practice that focuses on and records the past. True, this is one element of bookkeeping. To see your business thrive and not stay stagnant, you need to clearly see how your business performed from a month to month perspective each year.
These monthly and yearly numbers allow you to see trends, like which months are typically slower. By comparing your monthly numbers in the past, you’re then able to identify those slumps and decide if they require tighter budgeting or call for new strategies to boost sales.
Where You Are Now
Bookkeeping isn’t just about the past, however. Understanding how you are currently making and spending money in your business enables you to see what needs more attention. On a monthly basis, your bookkeeping needs to be tracking these ongoing metrics:
- Revenue—how much are you selling?
- Expenses—how much are you spending?
- Debt—how much do you owe?
- Profit—how is your business balancing revenue, expenses, and debt?
- Cash Flow—where and when is cash coming in and going out of your business?
Keeping an eye on where your business stands with these 5 metrics today allows you to compare growth to the past, which in turn…you guessed it, positions you squarely to prepare for the future.
Where You’re Heading
Having a clearly defined vision and set of goals will make it easier to create actionable steps to move toward and measure your goals. By identifying the short and long term goals in the most important areas of your business, you’ll be able to establish the fastest route to get there based on where you’ve been in the past and where you are now. This is the roadmap to your destination.
Whether you do your bookkeeping yourself or you outsource it, your bookkeeping should provide prediction charts and models that show where your company is heading in terms of the 5 key metrics we listed above. Are your sales and cash flow moving in the right direction, or are your expenses bogging down your profit?
Current monthly financials give you the information you need to keep your business on the right path and avoid costly detours or wrong-way turns. You remain in control so that you can proactively drive your business where you want it to go rather than reacting to what has happened.
So, this is why we believe that investing in bookkeeping is like buying the roadmap to your success. And unlike a Google map app sometimes does, bookkeeping done right won’t steer you in the wrong direction.
If you’d like to better understand how bookkeeping can drive your business growth, click the image below to schedule a call with us. We’d love to talk with you about how we can help you achieve your vision for your business. Learn more about us at tworoadsco.com, call us at (865) 212-0063, or get a price.