3 Consequences Of Poor Record Keeping For Small Businesses
By admin
Every business must master the act of proper record keeping to increase its chances of success.
Record keeping is an essential business activity and one of the earliest accounting tasks of a business owner.
Proper record-keeping is essential for a business to access external capital, make good decisions, and avoid unnecessary costs.
Unfortunately, the majority of small business owners still do not keep proper records today.
Here are 3 ways small business owners suffer from poor record-keeping:
1. Business Inefficiency
Many small businesses suffer from inefficiency, largely due to poor record-keeping that causes wastage of time and resources.
Poor record-keeping makes it difficult for your employees to retrieve needed documents and files.
When documents and files that record business transactions and events are difficult to find due to poor ordering, employees waste time and energy that would have otherwise been properly invested.
2. Unnecessary Costs
The loss or inability of a business to access key business documents have cost many businesses directly and indirectly.
Directly, in instances where tax documents are not filed on time due to the lack of needed information or duplication of payments.
And indirectly, in cases where records are missing or not properly kept, causing investors/lenders to turn down your application for capital or loan.
Whatever the case, poor record-keeping incurs costs small businesses would otherwise avoid.
3. Wasted Information
In many cases, you will find that useful information that would have contributed to the growth of a small business is filed, misfiled and kept in a manner that makes it difficult for the business to use it.
Small business data that have been collected over years that would have been referenced to make good decisions to grow the business are lost and buried in most cases.
This leads to business decisions being taken blindly without any data to support them.
Record keeping goes beyond writing and filing away documents and files. It entails the proper collection, organization and effective disposal.
Get more from The Business Builders!
Read back issues of our blog.
Buy The Small Business Handbook.
Enrol for The Business Accelerator Programme.
Download our FREE eBook on How To Find The Money to Start, Grow and Scale your Business.
Watch SME TV, our YouTube Channel.
Sponsor The Business Builders Newsletter.
Please follow and like us:
