Tuesday, July 29, 2008

3 basic steps to bookkeeping success


Big business owners are because of foolproof bookkeeping policies; for owners of small businesses, proper bookkeeping and accounting are the keywords to a brighter future. Indeed, bookkeeping brings in together the intricacies related to government regulations, marketing rules and their applications, various aspects of business operation and many of an assistance programs; all these form the very base of business record management and without proper bookkeeping or accounting measures, business success may just stay a dream.

Steps for success in bookkeeping

Things start from the point where a business starts. That is to say, the licenses, registrations, GST (Goods and Service Tax), RST (Retail Sales Tax), excise taxes and setting up the payroll accounts besides opening a business account for carrying out all the monetary transactions associated with the business. As the first step for a successful bookkeeping, keeping track of all of these is paramount. This is because financial records keep account of all income and expenses and this information is necessary for filing tax returns. Therefore, to get started, you need to keep intact your:

• Bills, receipts and payment vouchers: These are the small records that keep information regarding every transaction in a rudimentary form. That said, they are the biggest proofs for the business transactions your company was (and is) involved in. You won’t require to rack your brains for the transaction amounts, dates and other related details on specific sales/purchases id these are kept in a proper order.

• Income and expenditure summaries: Summarizing revenue generations and expenditures according to the category and date in a ledger (preferably, in digital format with a good accounting software) on a weekly or monthly basis shall keep your bookkeeping enthusiasm regular and complete.

• Financial Reports - Financial reports are themselves a summary of all the financial information of your business. The reports make for a regular cash flow analysis and forecasts regarding profits and losses forecast; therefore, maintaining a balance sheet is also paramount for an efficient bookkeeping.

Following the above steps shall make sure one thing; you won’t require to hunt the wilderness at the end of every financial year. Besides, it shall also save you from the labors of convincing the banking sector regarding your credibility in case you opt for a business loan. And above all, any document proving adequate cash flow is what the banks always target; with a planned budget, you can make a lot of your dreams come true without having to go through the unnecessary hassles.

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