Accounting: How regularly should bookings be reconciled?

We understand why that sounds tempting — who doesn't like saving money and time? But we must strongly advise against it for a number of reasons:

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1) Be able to provide information to the tax office

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In principle, it must be possible to provide the tax office with information if it has questions about the last tax return or other financial concerns. It is therefore advisable to always keep the accounting department up to date in order to answer questions quickly.

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2) Maintain financial control

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Regular bookkeeping provides a clear overview of income and expenditure. This facilitates financial control and helps to identify excessive spending, establish budgets and set financial goals, thus ensuring a healthy financial situation for the company.

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3) Make informed decisions

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A solid accounting system provides a reliable database for important business decisions. Whether it's about investments, expansion, or cost savings, accurate accounting helps you make informed and well-founded decisions.

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4) Be creditworthy

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When a company applies for a loan or financing, banks and investors often request access to accounting documents. Sound bookkeeping can improve a company's credibility and creditworthiness and increase the chances of successful lending.

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5) Act responsibly

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Careful bookkeeping shows that a company or person takes their financial responsibilities seriously. This can create trust among potential business partners, customers and suppliers.

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6) File correct tax returns

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Proper bookkeeping is essential for correctly calculating taxes and preparing financial reports. Incomplete or inaccurate bookkeeping can lead to tax return errors and increase the risk of tax penalties.

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Findings

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In summary, proper bookkeeping helps to ensure financial soundness and stability, to meet legal obligations, and to provide a basis for informed decisions. It is of great importance for the long-term success and integrity of a company or an individual.

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Numarics does the bookkeeping for you so that you can focus on your core business.

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Actually, you only have to update your accounting once a year — at the end of the year when it comes to filing your tax return. Right?
Well, not entirely.