Bird Box (in case you missed it) was a popular Netflix movie that featured Sandra Bullock in a blindfold for the majority of the movie, but I know some business owners are operating the same way. When I used to counsel others on personal finances, I used to have them read through the major parts of their bills themselves so they would realize how much they were paying in finance charges alone. Some of them didn't realize that finance charges were costing them more than they were paying monthly (laws have changed on that now) so their bill was going up every month without new charges and with regular payments. Are you tucking away receipts in drawers, boxes, bags, or glove boxes? Do you shove them across the desk to your poor tax professional at the beginning of the following year? Are you living in the state of "I don't want to know"? It's time to take the blindfold off and I will give you some reasons why.
UNDER PRICING - You may be undercharging customers/clients if you aren't tracking what that service or product costs completely, including time, shipping costs to get inventory, and even the PVC glue that may add up more than you realize.
TAX DEDUCTIONS- You are missing some items that should be realized as fixed assets with a proper depreciation schedule, you aren't putting all expenses that should be charged to the business (i.e. that book you are reading to help with your marketing), or you even lost a few receipts. Good tax professionals may catch many things you are missing, but if it isn't organized and intentional, often important items will slip through the cracks.
OVER TRUSTING VENDORS- The digital world has improved many causes of financial mistakes. However, it is still not foolproof by any means. I have still caught duplicate, inaccurate charges, improper billing of items, and of course the ever foreboding transposing of numbers. Ideally, you want to match purchase orders to received inventory and bills. You can then, match sold inventory to customer invoices and gain complete control. This can eliminate a lot of common vendor billing errors. In addition, review and tracking of all bills can further eliminate mistakes.
LOAN FINANCING- small business funding programs have improved over the years, but due to risk, typically ample and proper documentation to support their decision to back your business. Trying to put this together last minute is more than troublesome and often seen in the outcome.
DECISION MAKING MADE EASIER- Should you buy that new machinery or can you wait a little longer? Is that billboard paying off and benefitting your company? Can I afford to make some improvements to the building? Blindly making decisions can be frustrating and even devastating in the end. Knowledge really is power.
82% of businesses that failed cited cash flow problems as a factor in their failure. https://www.fundera.com/blog/small-business-statistics
There are so many benefits to tracking your finances (personal and business) that it is hard to list them all. It doesn't have to painstaking or hard, but I do think in the end you will feel so much better that you did.