Why is it Important to Keep Great Books?

In my time as a campground-specific bookkeeper and financial consultant, I have run across campground owners with different levels of bookkeeping expertise. Some campground owners try really hard to stay on top of their books every month. They feel that knowing how their business is doing is really important. Some campground owners keep receipts and have a "general feel" for how their business is doing. They say that they can tell how their business is doing by how much is in their account and how many spots are rented each night. Others keep receipts in a shoebox and give them to their CPA at the end of the year. Those folks tend to find out how much money they made (or lost) in March or April of the following year. Some owners have trouble keeping business and personal expenses separate. Others don't really know what the best credit card processing company is, or why they should choose one over the other. 

Regardless of the level of their bookkeeping expertise, all them have a few things in common.

1. They all struggle with bookkeeping.

You didn't go into the campground business to keep great books. You're a people person. No campground owner truly enjoys keeping the books. Most do it out of necessity. Therefore, campground owners struggle with keeping great books and using that information to help their business grow.

2. None of them actually have time to keep great books.

Let's face it. The campground owner is also the head of maintenance, store manager, desk clerk, computer technician, gopher, customer satisfaction specialist, and the customer complaint department. Who has time to keep great books when all of that other stuff has to get done right now? 

3. All of them are seeking great unbiased advice.

Whenever I help my clients save money on credit card fees, taxes, or employees, they are grateful. Often times, being a campground owner is like being on an island. You don't have a lot of people to bounce ideas off of or ask random financial questions. One thing that I have found is that my clients are always seeking someone to offer ideas or bounce ideas off of, and it's nice when that person has no financial interest in the outcome.

4. All of them would benefit from having great books. 

Whether you do it yourself or outsource it, you will benefit from knowing how your business is doing each and every month. Why, you ask . . . Read on!

Why is it important to keep great books?

1. It is the only way to know how your business is actually doing every month.

Do any of these situations sound familiar?

  • You get to the end of the year, and you give your financial information to your CPA. He or she says something like, "Wow! You made $42,000 this year." You smile, but you secretly wonder where the heck that $42,000 went.
  • It feels like you did more business this year than any other previous year (you certainly worked harder this year). You feel proud, but when you do the math, it turns out that you actually made the same or less money this year and you're not really sure why.
  • You've said something like, "I'd really like to take a monthly salary, but I have no idea how much I can take."
  • You've wondered what the best way to pay employees is. Pay them as independent contractors? Pay them as employees? What are the rules surrounding each?

All of these situations are pretty typical. I will say that there is a common solution to each one. Keep great books. Knowledge is power. You will know your business by knowing your books. I recommend using Quickbooks Online or Xero for your bookkeeping software. Both will help you keep track of your business and help you track income and expenses. If you want to figure out where that $42,000 went, or if you want to figure out how much you can take as a salary per month, having this information is essential. Keeping great books gives you control of your business instead of letting your business control you.

2. If you are planning to sell your campground in the future, prospective buyers (and their financial institutions) will want to see well-kept books.

If you are planning to sell your campground at any time in the future, you need to have at least three years of great books. Five years is stronger, and can result in a higher selling price. When I say great books, I mean that you need to have some sort of accounting software that helps you keep your books. Receipts in the shoebox and three years of tax returns works on occasion, but you won't be nearly as competitive. Think about it. Would you rather have 5 prospective buyers all competing to purchase your business, or would you rather have one prospective buyer that you have to convince to buy your business?

3. The government requires you to do so.

When you started your business, you filed with a government entity. When you did that, you were informed that you are required to keep records of your business. Maybe it hasn't been an issue, but if you were to get audited, it will be an issue. Having great books helps you ensure that an audit won't end with lots of fees and penalties.

4. Keeping great books will help you understand where you're money is coming from and where it's going.

How would you like to cut $1,000 in expenses? I'll bet your answer is a resounding yes! In order to do that, you have to know what you spend monthly on every single thing. That means that you need to know how much you spend on credit card fees, cleaning supplies, inventory for your store, repairs and maintenance, and employees. Keeping great books is the only way to know what you're spending and where you can cut back.

How do you keep great books?

Well, there are many different online courses that can help you do it yourself. I recommend checking out 50 Free Accounting Courses and Classes for Small Business Owners. Most of the courses on here can help you. After you do that, I recommend signing up for Quickbooks Online or Xero and learning that software. This will take some time. There are some complicated things in both systems, but they both have great customer support.

Of course, if you'd like to save both time and money, Happy Camper Bookkeeping can help. We will keep great books for you, be a partner you can rely on, and help you save time and money. You can schedule a free consultation or contact us at any time.