It is imperative that you maintain good bookkeeping records if you intend to, or have started a new business. Accurate records will keep you abreast of the company's historic as well as its present financial situation. Basic bookkeeping for new business start ups is not that difficult to set up, and if kept up to date will not require too much time to maintain.
With an effective system in place you will be able to identify if there are any problem areas in your company. You will be able to check your financial statements to determine which sections of the business need more attention. The statistics and figures that you require for statutory submissions will be on hand as and when you need them.
It is imperative that the system you choose is easy to understand and use. It should be reliable, accurate and consistent. The most used system which is normally taught in college and high school accounting subjects is one called a double-entry system. In this system each transaction is recorded twice. The procedure is to debit one account, and credit another with the same amount.
An illustration of this system could be shown when you purchase stationery. You will be required to debit the expense account, stationery. This will ultimately indicate how much you have spent on this expense in total. The other side of the entry would be a credit to your bank account or the cash account. The effect of this entry will show you how much money you have in cash or in your bank account, or the balance on your bank overdraft.
An alternate system is called a single-entry accounting system. This system requires each expense to be recorded once only. To implement this system you may need to obtain an accounting book with several columns, or you could use a spreadsheet computer program.
There are several computerized systems that could be used to implement basic bookkeeping for new business start ups. These systems are extremely simple to use and in-depth training is available. With this type of system, you will have the ability to obtain financial statements any time you need them.
With an effective system in place you will be able to identify if there are any problem areas in your company. You will be able to check your financial statements to determine which sections of the business need more attention. The statistics and figures that you require for statutory submissions will be on hand as and when you need them.
It is imperative that the system you choose is easy to understand and use. It should be reliable, accurate and consistent. The most used system which is normally taught in college and high school accounting subjects is one called a double-entry system. In this system each transaction is recorded twice. The procedure is to debit one account, and credit another with the same amount.
An illustration of this system could be shown when you purchase stationery. You will be required to debit the expense account, stationery. This will ultimately indicate how much you have spent on this expense in total. The other side of the entry would be a credit to your bank account or the cash account. The effect of this entry will show you how much money you have in cash or in your bank account, or the balance on your bank overdraft.
An alternate system is called a single-entry accounting system. This system requires each expense to be recorded once only. To implement this system you may need to obtain an accounting book with several columns, or you could use a spreadsheet computer program.
There are several computerized systems that could be used to implement basic bookkeeping for new business start ups. These systems are extremely simple to use and in-depth training is available. With this type of system, you will have the ability to obtain financial statements any time you need them.
About the Author:
All you should know about basic bookkeeping for new business start ups now in our super overview of only the best accountants west london and chartered accountants London .
0 comments:
Post a Comment