All You Should Know About Basic Bookkeeping For New Business Start Ups
If you have started or intend starting a new business, it is a good idea to keep good records. These records will keep you up to date about the historic and present financial situation of the company. Basic bookkeeping for new business start ups is easy to setup initially and by keeping it up to date, will not be too time consuming.
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.
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.
Many business owners opt for a single entry accounting system. In this system, each expense is only entered once. You will require a record book that has several columns for the various expenses. You could opt to use a spreadsheet program on your computer rather than the book.
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.
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