There are no wrong answers, but obviously we want to be making the best choices for our business to move forward.
Obviously the best place to be is with all your financial information captured up to date in a good accounting system. Good financial record keeping is essential for being able to make good business decisions.
Normally for entrepreneurs or small business start ups financial record keeping is the last thing on your mind. You are spending 99% of your time in your business to nurture and grow it. You focus your time, effort and skills in your business and just doing what you are good at. Slowly but surely your business starts to grow and make money and you keep doing what you are good at! The problem is not keeping accurate financial information can result in a situation where you are not tracking your costs and expenses correctly and that could mean you are perhaps even selling at a loss – and that is not why you started your business in the first place!
Keeping your financial records up to date means that you have access to your financial information whenever you need it. It would not be good to find yourself in a situation where you are being subject to fines and penalties because you did not have your financial information ready to file for tax purposes on time!
Similarly you want to be able to track the progress of your business and potentially even be able to report back to investors. If you are not accurately measuring the progress and growth of your business you are unable to make changes in your strategy to help your business grow further.
So where should you start?