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Why you need bookkeeping to be successful

I'm really passionate about bookkeeping.

I've been lucky to work for some very forward thinking accountancy firms and what this has taught me is that compliance is valueless. Yes you need to produce year end accounts, that's a given, but if you take a step back and think about it for a moment, what do you get from that?

It's just your tax bill isn't it?

Have you ever looked at your annual accounts, reviewed the figures and taken these as the starting point to push your Dental Practice forward? My bet is that at best you see your annual accounts like an end of school report. Dr Smith has done very well this year, profit is up but they still talk too much. You agree or you disagree. The end.

Accountancy isn't all about tax. If you think that's the case then you are using it wrong. Accountancy is actually about dreams and goals. I know when you started out, you didn't view your Dental Practice through profit and loss reports but you should have. Honestly; you should have.

Now you're thinking about profit and loss reports, please forget them. Let's push numbers aside for a second and talk about dreams. Not naked at an exam dreams but business dreams and aspirations.

Why are you a Dental Principle? What made you run your own Practice? Why are you putting yourself through this much stress every day?

Let's just say it's because you want to retire early and comfortably. You have a figure in your head; let's say you want to be able to sell your Dental Practice whilst you're still in your fifties for £1million. Tell your accountant this.

Instead of a business plan, imagine the years ahead as a map. It doesn't have to be complicated, it could easily be a simple treasure map. Draw an X and that it your end point; this is your £1million pound retirement pot.

Your accountant will now help you to draw the dotted line between where you are now and the big red X. You'll discuss prices, staff structures, your work/life balance. All of it. And never feel as though you shouldn't be talking to your accountant about these things. This is what they do; it's dreams and goals, not just tax remember.

So where does that leave me? You have your map and your route so you know what you need to do now to reach your £1million milestone.

Regular bookkeeping is like looking at the map. There's no point in having a map, putting it into your pocket and only checking your progress once a year. Before you know it, you'll think you're heading north when actually you've been knocked off course and you're miles west with an even longer journey now ahead of you. Bookkeeping is your pointers, it's the pub on the street corner, or the co-pilot that tells you that you're on the right track.

This is why I love bookkeeping. It's not the grand gesture of accountancy that greets you with champagne when you achieve your dream. Instead, it simply offers you a hot chocolate at the end of the day and tells you that everything will be okay.



 

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