Bookkeeping means to record and organize all of your financial transaction. Many Accounting Companies offer bookkeeping services which every business should consider to take. It is the key to success of your business. It’s like living a life in a bunker with no idea of how much time and sooner you will get run out of food and supplies and die with starvation.
Here you will know the 9 small business bookkeeping basics.
Know The Business Accounts:
Know the business account doesn’t mean to know the bank accounts. It means to have knowledge of all financial transaction of specific type.
Here are five basic types of accounts you should have knowledge of:
- Assets: All the cash and resources a company owns. In other words, all the money you have in your pocket.
- Liabilities: These are what you owe other businesses. In simple words, liabilities take out all the money you have in your pocket.
- Revenues or income: A company’s income generated by sales or whatever services it is providing.
- Expenses or expenditure: The money to give employees as a salary and the money use for the business to run properly.
- Equity: The remaining money after liabilities and expenses. In other words the money which the owner owns.
Organize Your Accounts:
You have just learned the basic knowledge of accounts. Now you have to organize them. Organize accounts doesn’t mean, you have to make charts or write on papers to build a file tower. Now a days, advance companies choose computer software to set up and organize their record accounts.
Accuracy Is Important:
It is important to pay attention while recording the data. At the end the recorded data is all you will be depended on.
Bank Statement —– Important!
It is important to wait for the monthly bank statement so that you will know which debts are cleared and which are still need to be.
Prepare financial statement:
After balancing your account, now you can prepare the financial report. Make a summery of whole month assets, liabilities, income, expenses and equity. Record a profit and loss of company it has faced.
Just be regular with the account work and you will not get burdened at the end of the month.
Security Is Important:
Secure accounts, secure records and accurate records are really important to maintain through out the month. Or you will get chasing by your boss for missing invoice.
Always Ready For Worse:
Emergency can anyway strike to your business at anytime. Prepare for it already. Keep out some percentage of your equity to use it for the worse situation.
In beginning, always seek help and work under the supervision of senior. So you will learn and will make less error. You can double check the accounts to keep the clear records.
Just keep working and focus on what you are doing. Once you are expert in your field you will take less time and will make less mistakes.