There are two basic functions of basic bookkeeping for new business start ups. The first function involves allowing all profits and losses that are made during a specific period to be easily calculated. This is basically done by keeping both records of income as well as expenditure. The second function involves ensuring that the exact financial status of the business can be checked at any time. This is done through keeping records of both assets, be they property or stock, as well as liabilities such as unpaid bills.
Again, in recording the above information there are two basic types of method that can be used. These are basically either single entry book-keeping or double-entry book-keeping. The difference between these two methods should be fairly self-evident through their respective titles. However, to spell it out double-entry book-keeping involves literally repeating every entry recording so there are two identical entries, while, of course in single-entry book-keeping the entry is made only once.
The size and scale of the business will be a factor in deciding which of the above systems are used. Basically very small businesses often opt for the single-entry system, although most actually opt for the double entry system due to its greater ability to make locating mistakes so much easier.
The details of keeping accounts correctly are too vast to deal with here, but here are some basic pointers. At the end of the day all transactions will ultimately be recorded in what is called a ledger. This ledger will be filled with entries that are divided between accounts known as cash accounts that are put beside accounts which record the transactions in more detail.
Further aspects of the practice include a so-called 'balance sheet' which is essentially a kind of statement comprising information on every asset and liability held. Specifically, assets will be entered on the right side with liabilities entered on the opposite side.
Suffice to say these are just some basic points regarding basic bookkeeping for new business start ups, and there is infinitely more to learn on this practice. To start with it may be a good idea to seek the advice of a trained book-keeper when going about dealing with new business accounts. However there are numerous short courses available that will effectively instruct any manager ion the basics. Many of these courses can be found online.
Again, in recording the above information there are two basic types of method that can be used. These are basically either single entry book-keeping or double-entry book-keeping. The difference between these two methods should be fairly self-evident through their respective titles. However, to spell it out double-entry book-keeping involves literally repeating every entry recording so there are two identical entries, while, of course in single-entry book-keeping the entry is made only once.
The size and scale of the business will be a factor in deciding which of the above systems are used. Basically very small businesses often opt for the single-entry system, although most actually opt for the double entry system due to its greater ability to make locating mistakes so much easier.
The details of keeping accounts correctly are too vast to deal with here, but here are some basic pointers. At the end of the day all transactions will ultimately be recorded in what is called a ledger. This ledger will be filled with entries that are divided between accounts known as cash accounts that are put beside accounts which record the transactions in more detail.
Further aspects of the practice include a so-called 'balance sheet' which is essentially a kind of statement comprising information on every asset and liability held. Specifically, assets will be entered on the right side with liabilities entered on the opposite side.
Suffice to say these are just some basic points regarding basic bookkeeping for new business start ups, and there is infinitely more to learn on this practice. To start with it may be a good idea to seek the advice of a trained book-keeper when going about dealing with new business accounts. However there are numerous short courses available that will effectively instruct any manager ion the basics. Many of these courses can be found online.
About the Author:
Learn more about essential points involved in basic bookkeeping for new business start ups now in our overview of all you should know about how and where to find top accountants west london and chartered accountants London .
0 comments:
Post a Comment