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Record Keeping – Importance & Benefits

  • cpadmin
  • March 4, 2020

IMPORTANCE OF TRACK RECORD (Record Keeping)

Keeping track record is an essential activity for those who wants to build a successful brand in any niche. Many times, this activity is not considered as much important as production, marketing & sales, but later on everybody feels the need of it at certain point of time.

What is Track Record?

In terms of Business, Record means putting all information into a usable form whether in books, spreadsheets or in software.

It’s Input data of Sales, Purchase, Dispatch, Accounts, Employee Data and many more.

Any record keeping system should be accurate, reliable, easy to follow, consistent as to the basis used and be very simple.

Why Track Record Is Important?

Keeping accurate data records is important for success of business by smooth functioning. Its most important management tool which helps in many aspects.

Appropriate record keeping is important to Monitor Progress in terms of Data Storage and analysis of all activities of Company and Accounting records to meet financial commitments of the business and providing information on which decisions for the future of the business can be based.

How Records help?

Healthy, honest and accurate Data contribute to the success of business in the following ways:

  • Preparing your financial statements of Profit, Loss, Expenses, Stock and Many more quickly and accurately.
  • Provides information to enable the control of cash in the business.
  • Provides management information to base business decisions on. Measures the business performance against the projections that were originally set down in the business plan.
  • Contributes promptly to assessing the financial situation of the business at any time.
  • Saves a lot of time and effort by avoiding redundancy and human clashes.
  • Keeps a good track of the costs of staff and their performance.
  • Highlights quickly areas where problems could arise and enable remedies to be put in place.
  • Fulfils the all Government Liabilities in terms of taxation
  • Assists in providing information required by your bankers
  • Helps in detecting thefts within the business itself.

Data Record Increases the chances of the business operating and achieving success.

What are the Types Of Records?

Finance Flow

  • Entry and organize purchasing information
  • Entry and organize information about Sales and Revenue
  • Track accounts payable and accounts receivable
  • Write paychecks and manage payroll information

Human Resource and Staff Management

  • Hiring and educating employees
  • Maintain records of employee work history and tax information
  • Administer employee benefits
  • Address employee issues and complaints
  • Take disciplinary action in case of poor employee performance

Purchase Procurement and Supplies

  • Record of Purchase and Procurement for manufacturing or service
  • Keep inventory records tracking what you have on hand as Stock
  • Record of issuance of material for manufacturing or service or supplies
  • Order records of supplies

Taking Care of Customers and Vendors

  • Keep record in Sales and Purchase registers
  • Data record of Receive and respond to customer feedback at every step.
  • Take care of customer needs and special requests

Projections and Goals 

  • Record of Budget set for marketing, branding, promotion, staff welfare or new projects or other
  • Manage company branding 

What are the Financial and Other Gains by Keeping Track Records?

The following check list will give you an idea of some of the things that your records will reveal as far as your business is concerned:

  • The current financial position and how much income you can expect to generate in the future (Income & Profit Prediction)
  • How much you owe for goods or rent or other expenses (Fixed and Variable Costs)
  • How much cash you have on hand and how much cash is tied up in other things such as stock (Money in Flow)
  • How often you turnover your stock (Stock Turnover)
  • Your gross profit and your net profit (Profit Percentage)
  • How your financial situation compares with last year or with your budgets. (Financial Growth of the Company)
  • What is Account Receivable and Account Payable in Market so we can make efforts. (Credit & Debit Figures)
  • What are your actual expenses and overheads compared to your projections or Budget? (Projection V/s Actual Scenario)
  • Which of your products are making a profit and which are running at a loss? (Profit- & Loss-Making Product bifurcation)
  • How your business compares in financial terms, as well as product quality and service supplied etc., with those of your competitors and with the industry in general. (Competition Analysis)

Summary:

Keeping track record and check lists are part of a well-organized system of a successful company. Well maintained records make the whole operation of the company smooth and easy.