Analytical Bookkeeping: What Is It And Why Do You Need It?

Analytical bookkeeping, you say? Sounds fancy. Sounds smart. Sounds like something you don’t need, right? Well, before you draw any conclusions, let’s talk more about it.

What is analytical bookkeeping?

Analytical bookkeeping is a form of accounting which separates your standard bookkeepers from the big leagues. In its essence, analytical bookkeeping is when your bookkeeper transforms from being an expert on the past and present and steps his or her feet into the future. What makes analytical bookkeeping special is that your bookkeeper can take those extra steps ahead and turn past accounting data into useful information which can help predict your future, whether it be money management techniques such as rolling budgets, or projecting sales revenues (forecasting). Most bookkeepers do not do this, as it typically falls outside of their strengths and/or training.

Why do you need analytical bookkeeping?

So why do you need it? Well, analytical bookkeeping is a service that all small businesses should seek. Analytical bookkeeping bridges the gap between traditional bookkeeping and the more advanced accountants out there who probably do and cost way more than your small business needs. The fact is, most small businesses do not need full-blown $60,000+ per year accountants. The effect of this, however, is that most small business owners do not expose themselves to personnel who are proficient at creating analytical accounting reports. Having an analytical bookkeeper on hand who can prepare reports to management regarding the future while still specializing in the nitty gritty daily grind is exceptionally valuable and often comes at a very reasonable price. Alongside that, a good analytical bookkeeper can help target strengths and weaknesses within the company and can help capitalize on the good or fix the bad. Effectively, your analytical bookkeeper becomes more valuable and will assist in all realms of your business.

So before you go saying that analytical bookkeeping is unnecessary or too fancy, give it some thought – it might just be worth it.