“Bookkeeping is an expense I could really do without!”
Maybe that’s you … and fair enough! – who wants more expenses?
But what if good bookkeeping is actually more than simply an expense? What if it has the potential to generate value beyond its cost? Consider three benefits of good bookkeeping that make it an investment worth looking at.
We’ll start with the boring one – compliance. Yes, at this level decent bookkeeping is something you just have to have. It’s a requirement. Sure, you can wing it for a while, but once that BAS comes around you are dealing with the federal government – and all of a sudden (with potential fines on the horizon) accuracy and timeliness take on a new importance. We could go on about all the troubles that could occur, but we won’t labour the point – this one’s just a given. And besides, we’re not just on about avoiding penalty (as great as that is!) but proactively demonstrating integrity: “for we aim at what is honorable, not only in the Lord’s sight, but also in the sight of man” (2 Corinthians 8:21, ESV)
Where good bookkeeping starts to get interesting is with the second benefit: useful reporting. One of the great things about modern accounting software is the plethora of reports that are available. But here’s the thing: a report is only as good as the data it’s drawing from. So, if the data is not accurate and up to date, your reports could be questionable, even misleading. Good bookkeeping means you are going to be able to generate good information about your business or church.
Now if you’re a smaller operator, you might be used to keeping all the detail in your head and just getting a profit-and-loss once a year. But have you considered the potential of having that same information each month, seeing clearly how your business or church is going? Not only would this alert you to potential dangers, but also to potential opportunities, almost in real time. It’s hard to put a value of this type of information.
And this leads to our third benefit of good bookkeeping: strategic efficiency. I am aware of an organisation (many years ago) that did some solid analysis of their processes. They discovered that 30% of the work being done was actually re-work – that is, work that had not been done properly the first time. Now imagine if that 30% could be reduced to 20% or 10%. In a large organisation, that would make a huge difference in efficiency and could equate to hiring multiple staff.
This is where good bookkeeping can have some of its greatest impact. If bookkeeping is done properly the first time, the ripple effect can be a big money saver. Not only does it save the time of re-work, but also of unnecessary work trying to figure out what’s going on, or trying to find paperwork, or understand a client history, or question a supplier charge, or manage cash flow effectively … (you get the picture).
In this way, bookkeeping ceases to be simply an expense, but becomes part of your strategic growth. Like every element of your operations your bookkeeping is then geared to align with your vision and contribute to the greater purpose. Think of it as an expression of good stewardship – handling whatever God has given us with faithfulness and kingdom values in mind – “it is required of stewards that they be found trustworthy” (1 Corinthians 4:2, ESV)
And that’s something worth bothering about.
Today’s post was kindly provided by Ed Johnson. Ed is the founder and owner of Exdia, a bookkeeping and administration service for Churches and small businesses. To find out more visit www.exdia.com.au