Bookkeeping is the process of recording transactions made in the business.
Through bookkeeping, a business owner can identify if a business is generating profits or losses. It is, therefore, important that all businesses, whether small or large, practice accounting.
Here are some bookkeeping facts every small business owner should know.
Time Efficient As a small business owner, you do not have to wait until the end of the month to start getting your accounts in order. A Distinct Tax Accountant and Bookkeeper can help you record entries daily, weekly, monthly, or quarterly as the transactions occur. This way, your work will be simplified by the time the month ends. Your records are also arranged in an orderly manner, making it easier for you to access records anytime.
It’s Not Intricate Bookkeeping does not require high skill levels. Some people think that bookkeeping involves broad knowledge and understanding of mathematics, but it entails writing down the figures on the day-books and then transferring them to the ledgers and creating income statements. If you find bookkeeping difficult, you can always seek us to help iron out the kinks.
Don’t Completely Rely on the Accountant The accountant you hire uses the information handed to them, and it is important that they look at your records on a monthly or quarterly basis. Therefore, you should ensure that all your files are up-to-date and that errors are dealt with accordingly. Accountants and Bookkeepers can offer financial advice from a professional perspective, but they cannot make the business decisions for you.
Pay Your Taxes on Time Some business owners postpone paying their taxes after using the tax money to add on to the capital; it is very hard to catch up on your taxes if you keep postponing payments. The tax money does not belong to the business and using it is illegal. You are obliged to pay your taxes on time.
Double Entry System The amounts recorded in the general ledger on the debit side should be equal to that entered in the credit side. The ledger should balance on both sides. Another aspect of the double entry system is the accounting equation, which states that assets = liabilities + owners’ equity.
These five facts should give you a new perceptive on small business accounting and bookkeeping and make it a lot easier for you to give us a call to handle this work for you!