Small Business IT Consulting – The Importance of Good Financial Records

If you work in small business IT consulting, you’re probably a techie by trade and not a financial whizz nor bookkeeper. Even so, keeping good financial records is of paramount importance for a number of simple reasons, which we list here:

1. Good records can reduce your accountancy bills. While it may seem tempting to throw all your invoices and receipts in a shoebox and hand it to your accountant at the end of the year, it should cost you less for their time if you can present them with spreadsheets and spending breakdowns. If your small business IT consulting firm is very small, you may even be able to do all of the accountancy work yourself.

2. Financial records help you track how your business is doing. Using a basic accountancy program will teach you far more about your business than you will learn from producing invoices in Word and keeping all of your receipts in disorganized envelopes. Amongst other things, financial software provides you with the ability to track which clients are spending the most and which are constantly paying late, as well as giving you a good overall view of whether your profit and turnover is moving in the right direction.

3. Good records will help in an audit situation. Everyone dreads an official financial audit, but you have far less to fear if you know all of your records are in order. Good records will speed up a stressful audit and prove to the “powers that be” that you take your financial management seriously.

How do you manage the finances within your small business IT consulting firm? Share your practices in the Comments box below. 

And to follow-through on the tips introduced in this short article, be sure to download your free copy of the special report on How to Start a Computer Consulting Business: 6 Proven Ways to Build Your Initial Client Base. 

Creative Commons Image Source: flickr The Shifted Librarian