All-Year Bookkeeping versus End-of-Year Bookkeeping
Great bookkeeping applies systematic routines and accounting principles to ensure the financial data of the business is valid. Keeping the books in great shape monthly, quarterly, or semi-annually takes time and money, and sometimes it is worth it and sometimes it is not worth it until the fiscal year-end. How do you know how often you should have the bookkeeping done?
Freestone Associates offers a few key points to support your decision-making on all-year bookkeeping or end-of-year bookkeeping.
A. All-year bookkeeping
Most experienced business owners have learned the benefits of a great bookkeeping system. Monitoring your business financials routinely can bring many added business benefits such as the ability to react quickly to unnecessary money bleeds, errors, and issues, and the ability to gain valuable insights that lead to higher revenue, more control over direct costs, and overheads, and ultimately much better cashflow.
B. End-of-year bookkeeping
Micro businesses and solopreneurs with few transactions, stable inflows and outflows, and annual discipline will likely benefit more from end-of-year bookkeeping. However, the main disadvantages could be time management stress and forgetfulness that could lead to missed deadlines, penalties, interest charges, and missed opportunities to legally minimize taxes. An improvement to the annual cycle could be the implementation of an automated system to post most of the transactions, leaving few bookkeeping tasks to do at year-end, thereby supporting the owner’s ability to think more strategically.
In our opinion, clients with evolving, growing businesses will prefer routine bookkeeping, while one-person businesses with few transactions will benefit from year-end bookkeeping. You need to assess your business for the number of monthly transactions and the stage of growth of your business to support the decision on which schedule of bookkeeping is right for you. In either case, we strongly recommend that you implement automation to minimize the time and costs associated with bookkeeping and to optimize the efficiency of the system which will increase your level of awareness, decrease your stress, and open your mind to strategic thinking.
If you are looking for a bookkeeper in Toronto, reach out to Freestone Associates. We have deep, multi-industry experience, pragmatic business sense, timely and reliable bookkeeping services geared to your needs. We can customize a cost-effective bookkeeping system and accounting cycle to provide you with the most useful managerial reports. We can provide training and ongoing oversight to ensure best practices with minimal cost. We provide services to delighted clients across the Greater Toronto Area.