Benefits of Keeping Records in Business
Record Keeping is a process by which you create and manage your business records in a manner that positively impacts your entire business. Your records are those source documents, either prints or electronic, that specify dates and timelines of the day to day activities in your organization (transactions, amounts of transactions, legal agreements, client, customer and business details).
Therefore, record keeping is very important in the business world, because it helps in many aspects—from production to marketing and sales. The following are the benefits of keeping records in your business.
- Improves legal compliance
- Helps monitor business progress
- Makes accounting and financial reports easy
- Helps in marketing and sales
- Addresses insecurity and fraud
- Efficient customer relationship management
Legal compliance relies solely on your ability to keep proper records of your business activities. You need to keep records of your registration documents as evidence that you own the company. This will help you in many aspects, including sorting your taxes, and claiming ownership of your business in court in the event that someone else wants to steal it from you. It also helps you file your taxes conveniently.
Helps monitor business progress. Keeping records helps you analyze your overall performance better. You’re able to track your performance and profitability by analyzing the patterns of your records. It helps you plan your production and forecast sales.
Makes accounting and financial reports easy. A good business depends on good record keeping. Without an accurate picture of your financial situation, you’ll only end up with plans that are based on mere trial and error, guesswork more or less. More over, intending investors and creditors usually prefer to base their decisions on well-organized financial records before staking their resources with you. You must keep detailed records of revenue and expenditures to measure your profitability or loss and as well reduce unnecessary expenses.
Helps in marketing and sales. Keeping records of your marketing and sales activities helps you gain deeper insights into your KPIs. It reveals the areas of marketing and sales that need improvement.
Addresses insecurity and fraud. Keeping records helps you ensure that your business is secure and less exposed to fraud. It makes it easy for you reconcile and balance accounts. In terms of addressing insecurity, keeping records via use of CCTV helps check theft from your employees and identify intruders’ faces when the need arises.
Efficient customer relationship management. With proper records of your customers, you’ll be much closer to them and can even send them your wishes on special days such as their birthdays, anniversaries, festive periods, holidayss, etc. In other words, it helps you make your customers happy.