Bookkeeping is essential to any business whether it is big or small. Unfortunately, this practice is neglected most of the time which in return negatively affects businesses. According to CPA Australia, there are businesses that fail because of bad management of their finances while others have poor or no accounting records. Apart from accounting or financial records being a necessity for businesses, they are also compulsory by law.
Australian legislation requires that businesses must have financial records that are up to date to make sure that they are able to pay all required levies and taxes. Accurate records should be kept for at least five years from the point when the documents were set or for a period of seven years for some records such as payroll.
To show the importance of bookkeeping, below are some reasons why it is essential to the growth and development of any business.