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.
Maintaining an effective accounting system will help you to identify the areas in your business that need attention. You will quite easily be able to see where you are making a loss and will have the opportunity to rectify the situation before it is too late. It will also allow you to have the necessary figures at hand for statutory returns that you may be liable for.
You should choose a system that will be simple to use and to understand. It must be a consistent, accurate and reliable system. The system that most people learn at school or in college is the double-entry accounting system. This system requires that every transaction be recorded twice. The requirement is to debit one account and credit another with the amount of the transaction.
An example of this system is if you purchase stationery for your company. In this double entry system, you will debit the stationery account which will show you exactly how much you have spent on this expense. The other side of the entry is to credit your bank or cash account. This will decrease the amount you have in the bank or as cash, or increase the amount of your overdraft facility.
You could opt for a single entry accounting system. You will need to obtain a columnar record book or you could use a spreadsheet system on your computer. Each expense is recorded once only.
Basic bookkeeping for new business start ups could use computerized systems that are available. These are very easy to use and training is available. A computerized system also gives you the ability to produce daily financial statements as required.
Maintaining an effective accounting system will help you to identify the areas in your business that need attention. You will quite easily be able to see where you are making a loss and will have the opportunity to rectify the situation before it is too late. It will also allow you to have the necessary figures at hand for statutory returns that you may be liable for.
You should choose a system that will be simple to use and to understand. It must be a consistent, accurate and reliable system. The system that most people learn at school or in college is the double-entry accounting system. This system requires that every transaction be recorded twice. The requirement is to debit one account and credit another with the amount of the transaction.
An example of this system is if you purchase stationery for your company. In this double entry system, you will debit the stationery account which will show you exactly how much you have spent on this expense. The other side of the entry is to credit your bank or cash account. This will decrease the amount you have in the bank or as cash, or increase the amount of your overdraft facility.
You could opt for a single entry accounting system. You will need to obtain a columnar record book or you could use a spreadsheet system on your computer. Each expense is recorded once only.
Basic bookkeeping for new business start ups could use computerized systems that are available. These are very easy to use and training is available. A computerized system also gives you the ability to produce daily financial statements as required.
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