Small business owners are responsible for many things. As a result, it's understandable if you use single-entry bookkeeping because you feel you can better use your time elsewhere. Unfortunately, this is one of those cases when the easy way out isn't as convenient as it seems. Double-entry dominates small business bookkeeping because it offers you more control and understanding of your business. Other people know this, so it comes with the bonus of making your numbers more credible. These things give you good reasons to switch to double-entry bookkeeping if you haven't already done so.
Your Books Become More Informative
You record more things when you use double-entry bookkeeping. This makes your books more informative. Suppose you've completed a sale. You'd record just the sale if you're using single-entry bookkeeping. In contrast, you'd also record what you've collected from the sale under double-entry bookkeeping, whether that means cash, accounts receivable, or a mix of both. More informative books give you a better understanding of how your business is doing at any given moment. Something that should empower you to make better decisions.
You Make It Easier to Catch Problems
It's unwise to expect everything to run well by itself. Instead, you should monitor your business so you can catch any problems that come up. Bookkeeping is no exception to this rule. Sometimes, people make small mistakes that can throw off your accounts. Other times, Zippia points out that 22 percent of small business owners have had employees steal from them. Whatever the issue, double-entry bookkeeping makes it much easier for you to track down its origins. Every transaction is recorded on both sides of the ledger. That means you automatically know something is wrong when they fail to match up. On top of this, the extra information expected for double-entry bookkeeping makes it easier for you to figure out the situation even once weeks, months, or even years have passed because you'll have more material to work with.
Your Small Business Seems More Professional
No business stands alone. That means you can expect to negotiate with other parties, which becomes smoother when you have credibility. A well-maintained set of books can make you more credible in some cases. One example would be when you're seeking a loan, while another would be when you're trying to convince someone to invest in your operations. It's widely known that double-entry bookkeeping makes for more accurate and comprehensive numbers. Thanks to this, other parties are likelier to trust your figures when you use double-entry bookkeeping rather than its single-entry counterpart.
For more info about bookkeeping, contact a local company.