A comprehensive process of recording individual financial transactions which aim is to ensure that financial records are accurate and up-to-date. Bookkeeping helps businesses to track their expenses and profits, which may assist them in making a better decision about where to allocate their resources.
Why You Need Bookkeeping ?
It is useful for both businesses or self-employed in completing tax returns, financial statements and manage cash flow. With bookkeeping, you can keep track of your income and expenses, monitor cash flow, calculate profits and losses and most importantly estimate taxes.
Provide professional bookkeeping services with expertise & accuracy. We use the latest accounting software to keep track of your finances.
By keeping accurate records of your income and expenses, you can ensure that your business is staying profitable and that you are paying the right taxes. Additionally, good bookkeeping practices can help you keep track of your company’s financial health, identify areas for improvement, and make sound decisions about future investments.
- One common bookkeeping mistake is failing to reconcile accounts. This means that your records don’t match up with what’s happening in your bank account. This can cause major issues when it comes time to do your taxes.
- Another mistake is not keeping good records of receipts and invoices. This can make it difficult to track expenses and income, and can lead to problems come tax time.
- Not all expenses are tax-deductible, so it’s important to keep track of what is and isn’t deductible. This can save you a lot of money come tax time.
- Finally, don’t forget to keep an eye on your account balances. Overdrawing your account can cause fees and other problems, so it’s important to stay on top of your finances.
A key factor to run a successful business, is to understand the basics of accounting & bookkeeping. The books need to be balanced and accurate so that you can precisely track your income versus expenditure. It can be done:
- Manually (record incoming and outgoing expenditure in a date order on a sheet)
- Accounting software (using a system that controls your finances and helps you save money, time and stress when deadlines are close).
- Single entry bookkeeping is the simplest form of bookkeeping. It is mostly used by small businesses and individuals. In single-entry bookkeeping, only one entry is made for each transaction. This means that there is only one account for each type of transaction.
- Double-entry bookkeeping is more complex than single-entry bookkeeping. In double-entry bookkeeping, two entries are made for each transaction. This means that there are two accounts for each type of transaction.
The main advantage of double-entry bookkeeping is that it provides a more accurate record of transactions. This is because each transaction is recorded in two places. The disadvantage of double-entry bookkeeping is that it is more complex and time-consuming than single-entry bookkeeping.