How You Can Keep Business Records

In the following paragraphs we will consider the reason behind keeping accounting records by the finish want to know , you’ve got the understanding so that you can keep some books within their simplest form for a small company.

What we have to look initially before deciding which bookkeeping system is the best for our business would be the following:-

So why do we have to keep accounting records,

Is our Business a little Cash Based Business

3, Does our Business offer Credit Terms to the Customers

Will we get Credit Terms from your Suppliers

You might not comprehend the above terms yet so lets consider the items at length:-

1 So why do we have to keep accounting records-

The very first reason we have to keep accounting records is that it’s a statutory requirement. In the finish in our financial year we must produce some accounts to be able to complete an individual taxes, or perhaps in the situation of the limited company file some accounts using the Registrar Of Companies. And as registered for VAT we want the data from your records to accomplish Vat Returns.

Next and the most crucial so far as we’re concerned is really that people can keep an eye on where our clients are going:-

Shall we be making money or perhaps a loss?

Which products inside our business are making money and that are creating a loss?

Shall we be using the strategic business plan we come up with before we began our business and did our initial business research?

We might have come up with a Strategic Business Plan which we required towards the Bank to get financing to begin our business. When we did the probability is the bank need to find out if our clients are consistent with that plan regularly. Quite simply the financial institution may request you to produce Monthly Management Accounts”

2. Is our Business a little Cash Based Business?

When we only have just began our business, whether it’s a small work from home company, we most likely begin by only selling products to those who have compensated us first. Similarly because we’ve only began our business we most likely cannot get credit facilities from your suppliers so we must pay cash in advance to obtain our products. If this sounds like the situation we simply need a simple bookkeeping system. All we have to do is keep an eye on our Cash Receipts and funds Payments. All we want for this is exactly what Accountants call a money Book.

Leave a Reply

Your email address will not be published. Required fields are marked *