Bookkeeping is Your Business’s GPS

It’s Friday night and you’re completely exhausted. You’ve put in another massive week quoting jobs, managing staff, dealing with customers, and, of course, doing the actual work.

You think, “Another week done,” but then you wonder if all this hard work is actually getting you anywhere, or if you’ll be doing the exact same thing in five or ten years.

Whether it’s more freedom, more money, or a chance to build something, you got into business for a reason. But right now, it feels less like a business and more like you’ve just created a high-stress job for yourself.

If that sounds about right, it’s time to talk about your books. And no, I don’t just mean getting that shoebox of receipts ready for your quarterly tax paperwork.

I’ve just read a great business book called The E-Myth Revisited, and it talks about your “Primary Aim.” The idea is simple: you need to know what you want from your life, not just what you want from your business.

So, forget about work for a minute. What do you actually want?

• To step back from the daily grind by age 50?
• To take the family on a proper holiday without your phone ringing off the hook?
• To own a home that you can pass on to the next generation?

That’s your Primary Aim. It’s the ‘why’ behind the long hours. The problem is, most people have a vague idea of their ‘why’ but no clue if they’re getting any closer to it. It’s all just guesswork.

That’s where bookkeeping comes in.

Most small business owners think bookkeeping is just a chore to keep the tax office happy. Fair enough.

But it’s also your business’s GPS. It’s the only thing that tells you if you’re heading in the right direction or just driving in circles.

You wouldn’t set out on a cross-country road trip without a map. So why are you trying to build your life’s work with messy financials and a “hope for the best” attitude?

When you connect your books to what you actually want, things start to click. Here’s how.

“More money” is a wish. Let’s use a real goal: “I want to buy an $800,000 house in five years.”

To get a bank to take you seriously, you’ll need a solid 20% deposit to avoid hefty insurance costs. That’s $160,000. You’ll also need to prove a stable, consistent income to service the loan.

So the real business goal isn’t just to buy a house. It’s to be profitable enough to draw a consistent salary and save for a $160,000 deposit over the next five years.

This is where you put coordinates into your GPS. Let’s do some quick math:

• Deposit Savings: $160,000 divided by 5 years is $32,000 per year you need to save.
• Your Salary: Let’s say you need to show the bank a stable income of $90,000 per year to comfortably get the loan.
• Your Business’s Job: Your business now has a clear annual target. It needs to generate enough profit to cover your salary plus your savings. That’s $90,000 + $32,000 = $122,000 in annual profit.

Suddenly, “buy a house” becomes a clear business target of at least $122,000 in net profit each year. Now you have a number to aim for.

Your monthly Profit & Loss statement isn’t just a document for the ATO; it’s a progress report on your house goal. Are you on track to hit that $122,000 profit for the year? Are material costs creeping up and threatening your goal?

When bookkeeping is done correctly, it gives you the hard data you need to make smart decisions, not just guesses. It tells you whether you can afford that new piece of equipment or if you need to raise your prices to protect the margins you need to hit your target.

When you start looking at your financials this way, bookkeeping stops being a chore. It becomes the map that guides you to the life you’re working so hard to build.

So this weekend, instead of just thinking about the next job, or the next client, ask yourself, “What’s the actual plan?”

Once you know the answer, your books will show you how to get there.

Val