Strategies for setting up a basic small business bookkeeping system are valuable information for all serious minded entrepreneurs. It prepares a formidable foundation for effective financial management. The first step in effective and efficient financial management is to set up your own basic bookkeeping system. How do you do that? You do that by choose a simple record-keeping system that is easy to understand. This record system should be simple to use, accurate, reliable, and consistent and condiment with all the features that will enable you to provide information on a timely basis. This will help you to see how well the business is progressing.
The most useful system for a small and start-up business is generally based on the principle of “one-write system” since it captures information at the time that individual transactions take place. It is an efficient method that enables to computerize information, it is compatible with electronic data processing, and has the capacity to eliminate the need to recopy data.
It is very fun using it, however, if you do not understand book keeping, it is advisable you employ a knowledgeable accountant to set up your books of records following the principles above.
Quicken and QuickBooks are two basic software systems that are inexpensive and user friendly. They allow business owners to quickly and accurately handle regular financial record-keeping tasks like a pro. If you want a dedicated bookkeeping system, you can visit a software manufacturing company to figure that out for you.
Well enough of the talk let us get down to business. In this article I am going to share with you five fundamental bookkeeping journals. They are as follows:
1. Sales journal: This is a bookkeeping journal that shows the business transaction, date, for whom it was performed, the amount of the invoice, and sales tax (if applicable.). It is sometimes subdivided to indicate labor and goods.
2. Voucher register: This is a record keeping register used to show record of bills, money owed, and the date of the bill, to whom it is owed, the amount, and the service provided.
3. Cash receipts: This is a record keeping journal that is used to show the amount of money received, from whom, and for what.
4. Check register: This is a journal of record keeping that shows each check disbursed, the date of disbursement, check number, payee, the amount of money disbursed, and for what purpose.
5. General journal: this is a record keeping journal that provides a means of adjusting entries in the other four journals.
6. Payroll records: This is a journal that shows the record of the amount paid to employees. It indicates bonuses, tax deduction, basic salary, overtime, etc. Together with above, you have all the information necessary to complete tax reports and returns as they come due. At the end of each annual accounting period, all the information for filing your tax returns will be at your fingertips. The figures from these journals are all you need to prepare your Financial Statements.
For you to set up a formidable bookkeeping system, these journals are fundamental requirement. It offers the privilege of upgrading to more advance levels. This system can later be converted to an accrual method of accounting by simply journalizing accounts receivable, payable, accruals, prepaid insurance, etc.
While setting up a small basic bookkeeping system, it is important to maintain two updated sets and keep one off the premises. Pay attention to above information and would have succeeded in having all the relevant information you need for setting up a basic small business bookkeeping system.
The most useful system for a small and start-up business is generally based on the principle of “one-write system” since it captures information at the time that individual transactions take place. It is an efficient method that enables to computerize information, it is compatible with electronic data processing, and has the capacity to eliminate the need to recopy data.
It is very fun using it, however, if you do not understand book keeping, it is advisable you employ a knowledgeable accountant to set up your books of records following the principles above.
Quicken and QuickBooks are two basic software systems that are inexpensive and user friendly. They allow business owners to quickly and accurately handle regular financial record-keeping tasks like a pro. If you want a dedicated bookkeeping system, you can visit a software manufacturing company to figure that out for you.
Well enough of the talk let us get down to business. In this article I am going to share with you five fundamental bookkeeping journals. They are as follows:
1. Sales journal: This is a bookkeeping journal that shows the business transaction, date, for whom it was performed, the amount of the invoice, and sales tax (if applicable.). It is sometimes subdivided to indicate labor and goods.
2. Voucher register: This is a record keeping register used to show record of bills, money owed, and the date of the bill, to whom it is owed, the amount, and the service provided.
3. Cash receipts: This is a record keeping journal that is used to show the amount of money received, from whom, and for what.
4. Check register: This is a journal of record keeping that shows each check disbursed, the date of disbursement, check number, payee, the amount of money disbursed, and for what purpose.
5. General journal: this is a record keeping journal that provides a means of adjusting entries in the other four journals.
6. Payroll records: This is a journal that shows the record of the amount paid to employees. It indicates bonuses, tax deduction, basic salary, overtime, etc. Together with above, you have all the information necessary to complete tax reports and returns as they come due. At the end of each annual accounting period, all the information for filing your tax returns will be at your fingertips. The figures from these journals are all you need to prepare your Financial Statements.
For you to set up a formidable bookkeeping system, these journals are fundamental requirement. It offers the privilege of upgrading to more advance levels. This system can later be converted to an accrual method of accounting by simply journalizing accounts receivable, payable, accruals, prepaid insurance, etc.
While setting up a small basic bookkeeping system, it is important to maintain two updated sets and keep one off the premises. Pay attention to above information and would have succeeded in having all the relevant information you need for setting up a basic small business bookkeeping system.
Wishing you a blissful business experience!
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