Whether you’re a startup or a multinational corporation, bookkeeping is an essential part of your business that ensures your financial health. It helps you establish a budget, records your transactions, aids in future planning for your business, and much more!
Here’s everything you need to know about bookkeeping and management
What is Bookkeeping?
Bookkeeping includes the process of keeping track of every single financial transaction made by a business from the beginning to the end. Though the job description may sound similar to an accountant, a bookkeeper isn’t mean to analyze and interpret data, unlike an accountant.
How Does it Work?
When setting up bookkeeping for your business, you need to decide between using a cash and accrual accounting system. Single-person businesses such as startups should choose the former, whereas businesses run by multiple people should go for the latter.
In an accrual system, the transactions are recorded immediately, making it perfect for a credit-based system. In contrast, cash accounting systems record the transactions only after the cash is actually exchanged.
A single-entry system records every transaction in a journal or log and is usually used by smaller businesses and startups. A double-entry accounting system is ideal for those businesses that are more complex and bigger, which involves double entries for every transaction, known as debit and credit. Each entry or transaction is made in the debit and credit account, allowing for easy and simple error checking.
What do you Need for Bookkeeping?
Most businesses use a computerized accounting system for their bookkeeping. This includes complex software developed for their personal needs, allowing them to keep track of their entries and financial journals. A business also needs to set up a chart of accounts that contains all the account names and numbers that the company should have.
Alternatively, you can outsource your bookkeeping services. As a one-stop solution for businesses looking to increase efficiency, outsourcing bookkeeping services allow or cutting down on time and costs spent on auditing. Hiring experienced bookkeepers for your business will ensure that there’s no room for error in your logs, making business functioning more competent through an overall seamless process.
Bookkeeping Services for Businesses
For professional bookkeeping services, check out Time Square Tech! They manage external auditors and tax agents while clearing the backlog in the book of accounts with different bookkeeping schedules that suit your business.