Business and Management Finance

Reasons Creative Businesses Must Take Accounting Very Seriously

Yes, we are creative, and we are passionate. Yet, we are often reminded of the vivid realities that there are bills that must be paid and goals that must be reached. This fact should not reduce our creative vibe, instead it should fire us to better efficiency, through which we wil be able to reap more benefits from our creativity. Accounting is one of those key areas where if we will ever attain efficiency as creative brands, we must first attain mastery. Keeping ‘the books’ is more than a job function, it is a culture we must imbibe for our sustainability.

Accounting is an information system that measures business activities, processes and communicates financial information. External users that make decisions about your business entity and Internal users that make decisions for the entity are the two category of people that use Accounting Information..

Accounting information points the direction of your business and determines the success or failure of the business. The accounting process is an important function of business as it reveals financial inconsistencies and redundancies which could lead to better business operations. Having complete and current accounting, properly executed, can make the difference between business success and failure. Keep reading to see why accounting is important and how it can help you start “rollin’ in the dough.”

Why does accounting Matter?

Understand the financial health of your business.
You’ve invested heavily in your business – your time, your money (maybe other people’s money), and a lot is riding on your success. Without proper accounting you can never have a true, real-time gauge of the health and value of your company. As the owner, it’s your job to responsibly steward your company’s assets and liabilities. You can’t know that this is happening without access to the proper accounting reports.

Be a better candidate for future financing.
Unless you’re independently wealthy and willing to self-fund any capital needs your business may have, the time may come when you’ll need an infusion of green backs. This can happen for a number of reasons. Your business may grow like a weed, and you’ll need a line of credit to fund growth. Or you may experience an unexpected setback and need capital to keep things running smoothly until your next sale.

Whatever the case, if you have current and accurate accounting records, getting the money you need from a bank or potential investors will be much easier. Even if you only ever seek financial help from friends and family, having good accounting records to show them will demonstrate that you respect their investment and will safeguard their trust.

Get to your end goal faster.
Whatever your business goals – selling to a bigger fish for a lump sum, providing a stream of income for your retirement, or doing something philanthropic for your community – proper accounting can help you get there faster. Accounting will provide you the insight you need to make better decisions about your business finances. And better decisions will directly affect the short and long term success of your business.

Finally, the longer you wait to implement a proper accounting system in your business, the more it will cost to implement one in the future. Starting from day one will prevent costly mistakes that will have to be corrected eventually (by avoiding them all together). Manually culling through hundreds or even thousands of invoices and receipts months or years after the fact will cost exponentially more than implementing a simple accounting system at the outset of your business.

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