Bookkeeping is a desk with lots of paper.

The idea that bookkeeping has to involve mounds of paper covering the desk and it eventually ends up in a neat pile is quite an old concept.

It was the predominant view as recently as 20 years ago even though the move from ledger books to computerisation (think Myob, Xero, and plenty of others) was well under way. It remains the view today in many businesses where a physical filing system is driven alphabetically or by date or by something else!

That particular invoice may need to be recovered sometime down the track and the business owner will know exactly where to get it from. Of course, it is never needed and the silverfish have a glorious time.

It is difficult to turn around the idea that something printed is never disposed of or that an electronic copy is every bit as good as a physical one and can be just as accessible.

Lots of paper produces figures.

Figures are produced from all those bits of paper put together in a non-random fashion so the business owner can ‘prove’ to the ATO that the business is not doing anything disreputable.

If it weren’t for the ATO, getting the business figures would be such a waste of time! Apart, that is, from finding who hasn’t paid their invoice and what bills are outstanding and knowing whether the business is progressing or going backwards.

It is still widely held that the balance in the bank account is a good indicator of the health of the business!

The figures are keys.

The bank balance is indisputable but has to be backed up by a set of other figures that tell a broader story.

That set of figures can be both historical and projecting forwards as budgets. Both are important for knowing where a business is, where it has come from, and where it hopes to go.

If the figures produced from the paperwork aren’t used for these purpose, it really does beg the question of what use are they.

Armed with these figures, the business owner can make decisions that are now-based, in tune with reality, and with an eye for where the business needs to go.

At Birkdale Bookkeeping Services we love to help business owners get their paperwork out of sight and to assist them with how they view the resulting business figures.

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