Why Do I Need a Bookkeeping System?

When starting your Dealership, it's always tempting to run the business from the home check book. Writing out checks for bills, materials, etc. is easier because you are already setup, you don't have to put money in a new account and it simplifies where and how you write your checks.

The problem comes when your business begins to grow and you want to begin tracking cash flow, profit and loss and other measures that show the health and vitality of your business.

A professional bookkeeper or software program, accompanied with a stand alone account, is a worthwhile investment for a number of reasons.

1) The bookkeeper or accounting software will show you areas where your Dealership can improve. How much did you spend on materials? When did you increase inventory levels? What did this increase do to the cash flow in your business and how long did it take to turn the inventory into liquid cash? These answers, along with a hundred others, are the types that are answered by organizing your Dealership.

2) Running your business through the home checking account can also hide a number of critical deficiencies. These deficiencies, if left unchecked, could cripple your business in the long run. Is the business truly profitable or is another income stream within your home covering up the shortfalls? Are there certain expenses being included within the business that are strictly expenses that should be allocated to running your household? Are these expenses deflating the profitability of the business? Organizing your business financially can eliminate this confusion and lead to greater profitability now and as the business grows.