Simple and Effective Tips for Keeping Accounting Records
Record keeping is vital to show the financial position of a company. Start-up businesses survive on razor-thin profit margins, so the owner should improve the odds of success by keeping careful accounting records. An accurate and well-organized record makes it easier to prepare the cash-flow statement and final accounts. It’s also a legal requirement as at the end of a financial year the company needs to show its financial position to the government so that the latter could tax it accordingly. To do this accurately, a business manager needs to follow these steps:
Keep invoices and receipt
Invoices help the business firm to keep track of its income. It can be created by using a basic ledger book or one of the various one write systems available these days. However, if the business owner is apt in operating computer, then it’s better to make a spreadsheet to do the same. Well, whatever method one chose for making invoices, it should include information about the task, the date it was started and finished, and the amount paid. Also, it’s important that each invoice is numbered sequentially so that it would be easy to make the financial report at the end of the year.
Keeping track of expenses is the best way to stay tax efficient. So, a business owner should keep the record of the expenses including office rent, supplies, raw materials, travel, business lunches, etc. And, the best way to maintain the record of the major and miscellaneous expenses is to keep the receipt and other written evidence.
Get the rights apps
Keeping good accounts can be the easiest task with the help of any of the various apps available in the market. There are also many free apps that can be efficient in recording the expenses and maintaining the invoices.
Setting up the books
Setting up accounting books by using the right method is the toughest part of the entire process. Double-entry accounting is a complicated task, so a small business owner should learn the accounting principles. It has become quite simple today, thanks to online accounting classes. However, if it’s not possible to take out enough time to learn accounting skills, then it’s better to take help from a professional accountant.
Data that must be recorded
The accounting books provide an entrepreneur with the much-needed information about the payable taxes and the financial status of the company. Here are some important elements of financial accounting:
Sales: It is important to keep the record of the money that the company earned by selling its services or products.
Value of inventory: This is something the business manager need to count manually, because the accounting system, at best, can only tell about the things that are on hand.
Investments:It includes all the expenses involved in a business operation such as labour cost, payrolls, rent or lease, raw material cost, machinery cost, and other expenses.
Creating and maintaining these business records will help an entrepreneur in analyzing the business’s profitability, staying out of trouble with tax authorities, maintaining positive relationships with customers and outsourcing agents, and protecting the business from lawsuits.
Hope you are now well aware of the various steps required to keep accounting records for a start-up business. If you need more information on the subject, then seek help from the cost accounting assignment help experts working at Global Assignment Help. Also, if you’re unable to write your accounting assignments, then our accounting expert team can provide you with high-quality academic documents that too at affordable prices.