Why is Good Recordkeeping Needed?
Being a prominent accounting company in the UAE for over a decade has helped us at KGRN Accounting Associates learn that most business owners have no real idea about how improper account recordkeeping can affect the state of their business. To many people, maintaining records of their accounts is simply writing down numbers. What they don’t know is that understanding and maintaining good numbers can help you overtake your competition and reduce the chances of failure.
Here are a few reasons that will help you understand the need for good recordkeeping:
- If you don’t understand it you can’t manage it
Properly maintained accounts are well organized and recorded neatly. This way anyone who takes a look at them can immediately understand what they mean and what you are required to do in order to improve your business or maintain its current position. If you cannot understand your account records, it will affect your ability to manage losses, profits, liabilities, expenses and receivables.
- Poor records equals to poor profits
If your business’ records are well maintained, it will enable you to device you next step to improve your progress. As a result you will be able to earn higher profits. Poorly maintained records can lead to major losses for the company. It can result in inaccurate estimations that could reduce your company’s earnings or promote losses.
- Inadequate recordkeeping can end a business
If information is missing or incorrectly recorded, it can seriously affect your calculations for your current operations or next project. This could mean over estimations and unnecessary blockage of funds, or limited resources to keep things going. All it takes is one mistake to end your career.
- Good recordkeeping saves money
When your business is audited by the government, they will scrutinize every detail. With proper accounting records, you can ensure all your debts, bills and taxes are paid and you are in the clear. Good recordkeeping will see that all legal requirements are met and that your business activities stay within the law.This prevents you from having to pay heavy penalties and additional taxes.
- Good recordkeeping can detect as well as prevent fraud
With the assistance of knowledgeable accountants, you can maintain your accounts efficiently and retrace every entry made. So in the event of accounting discrepancies you will be able to identify the source and the person engaging in fraudulent activities.
- Make better decision
Good records are like factual information you can rely on. If you base your business decisions and plans on good accounting records, you can be sure to see desired results. It will also enable to react quickly and make well informed decisions.
- Avoid overpaying
With good accounting records, you are less likely to overpay your taxes. It will ensure you pay the right taxes at the right time so that you avoid paying extra. Good records can also reduce your accountant’s fees because he has less to sort out.
It takes just one wrong move, one incorrect calculation to make a business crumble. Are you willing to take that risk with improper recordkeeping? For accounting assistance from Dubai’s finest, call KGRN Accounting Associates today.