When you start your own company then it is important not to neglect your accounting. You will need to keep excellent records for tax purposes. You may find that you are not in the position to hire anyone to help you with this. Here is a guide to basic bookkeeping for new business start ups.
You can find software to help run your accounting needs for free, although for the best it is worth buying a complete office pack. If you have very little computer knowledge then it is worth joining a local college or hiring a computer to help you gain confidence and understanding.
Before you start working on computers to sort out your accounting it is worth taking time to learn more traditional methods of bookkeeping. This is when books were used to record all transactions rather than being kept on a PC. Spreadsheets and specialized accounting packages are now more commonly used.
You will need a sales ledger. This can be done in written form or recorded on a simple spread sheet. You will keep a record of every single sale you make, and when payment was made. Secondly the purchase ledger is used to list all the purchases that you make for the company.
A cash book is basically like your bank statement. The dates of cleared payments will be noted down which will differ slightly from your other ledgers. And the fourth book is for records of all your business assets.
These books are then used to create comprehensive accounts. You can find your profit gain or losses and create a balance sheet as well as a cash flow forecast. These are essential records which need to be kept in a safe place. You will then be able to show your information to the IRS at the end of the tax year.
You can find software to help run your accounting needs for free, although for the best it is worth buying a complete office pack. If you have very little computer knowledge then it is worth joining a local college or hiring a computer to help you gain confidence and understanding.
Before you start working on computers to sort out your accounting it is worth taking time to learn more traditional methods of bookkeeping. This is when books were used to record all transactions rather than being kept on a PC. Spreadsheets and specialized accounting packages are now more commonly used.
You will need a sales ledger. This can be done in written form or recorded on a simple spread sheet. You will keep a record of every single sale you make, and when payment was made. Secondly the purchase ledger is used to list all the purchases that you make for the company.
A cash book is basically like your bank statement. The dates of cleared payments will be noted down which will differ slightly from your other ledgers. And the fourth book is for records of all your business assets.
These books are then used to create comprehensive accounts. You can find your profit gain or losses and create a balance sheet as well as a cash flow forecast. These are essential records which need to be kept in a safe place. You will then be able to show your information to the IRS at the end of the tax year.
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