Bookkeeping and accounting are necessary for you to keep records of the transactions and the financial information of your business and its progress. For many the job appears overwhelming. No matter how cumbersome bookkeeping and accounting seem, it is very simple to have both done for your business. In fact, bookkeeping actually used to be daunting because before computer use became so common, a person, the bookkeeper, who would keep all the records organized, did the job. With the advent of user-friendly computer systems, bookkeeping and accounting for your business information has become much efficient and easier. Let’s start from the primary purpose: Why do we need to keep books?
• Keep your expenditures systematically recorded.
• Review the expenditure and income periodically. You should keep on updating you records frequently, say on monthly or weekly basis.
• Use these records to make financial reports that summarize how progressive your business is and how much profit you are making.
Here are the steps of bookkeeping that have to be followed whether you do it electronically or manually;
• Keep Receipts
Make sure you have all the data recorded so that you can give it a presentable form. Keep your receipts organized in a computer system. You are later going to need these records of the transitions made in future. The more your business expands the more organized you need to be. So star today and save the information systematically.
• Keeping Ledgers
Complete your ledger by having all the data organized: compile all the records of the expenditures and incomes and whatever you want to keep track of from your receipts. Your completed ledger can be helpful when you seek answer to the questions related to your business such as the financial information.
• Create Financial Reports
Financial reports summarize all the financial information concerning your business. With finely developed financial reports you can go back to any piece of information you seek in a hassle-free manner. You need to have financial reports to know the progress of your business at a glance. Through these you can easily figure how well your customers are paying. The cash flow analysis would be accessible to you and thus you will be updated about the progress of your business. The most important of financial reports are
o Cash flow analysis
o Profit and loss forecast
o Balance sheet
For your new business, it is immensely important you acquire the bookkeeping tactics and learn popular tips to help you proceed. Good luck!