More Essential Factors That Are Involved In Basic Bookkeeping For New Business Start Ups

By Peter Colwell


There exist two basic aspects of basic bookkeeping for new business start ups. Firstly, recordings should be made of both financial incomings and outgoings. This ensures the facility of keeping track of all profit and loss that may occur within a set period. Secondly any outstanding bills or any other monies due should be recorded alongside any assets such as property or stock. This again will ensure the facility of ascertaining the exact financial standing of the business.

Again, in recording the above information there are two basic types of method that can be used. These are basically either single entry book-keeping or double-entry book-keeping. The difference between these two methods should be fairly self-evident through their respective titles. However, to spell it out double-entry book-keeping involves literally repeating every entry recording so there are two identical entries, while, of course in single-entry book-keeping the entry is made only once.

Depending on the size and function of the business, one can choose between these two methods. If a business is particularly small many managers will decide on using the single-entry method. However, many people prefer the double-entry method simply because if mistakes are made they can be easily located when this method is used. Moreover this method has the added advantage of being able to deal with unpaid bills and accounts.

To go into every detail involved in keeping the books is out of the scope of this article, so below follow some of the most essential points. To begin, each and every entry will be recorded in a so-called 'ledger'. More specifically, each transaction will be recorded here in both simple cash accounts and accounts that note the finer details of the transaction.

Further aspects of the practice include a so-called 'balance sheet' which is essentially a kind of statement comprising information on every asset and liability held. Specifically, assets will be entered on the right side with liabilities entered on the opposite side.

These are just some brief points regarding basic bookkeeping for new business start ups and anyone thinking of doing their own accounts should either continually consult a qualified professional or consider embarking on one of the number of training courses that exist. A quick online search will reveal many choices in this respect.




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