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.
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.
It is important that the system is easy to use and understand, consistent, reliable and accurate. The system that is most generally used, and which is taught in high school and college accounting classes is the double entry system. This entails recording each transaction twice. One account will be debited, and another will be credited with the 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.
You could opt to use a computerized system for your accounting needs. There are various types and levels of systems available. They are easy to use and if you need it, training is normally available. If kept up to date, this type of basic bookkeeping for new business start ups computer system is able to provide you with financial statements at short notice.
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.
It is important that the system is easy to use and understand, consistent, reliable and accurate. The system that is most generally used, and which is taught in high school and college accounting classes is the double entry system. This entails recording each transaction twice. One account will be debited, and another will be credited with the 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.
You could opt to use a computerized system for your accounting needs. There are various types and levels of systems available. They are easy to use and if you need it, training is normally available. If kept up to date, this type of basic bookkeeping for new business start ups computer system is able to provide you with financial statements at short notice.
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