It is a sad fact that the primary cause for failed businesses is the inability to keep a firm hold over cash flow and financial record keeping. In fact, many small business owners do not even know their day to day financial status. In this way it is easy to over extend the business or to allow debts to grow to unacceptable levels. With help from a reliable bookkeeper Northamptonshire businesses can make sure that they keep proper records and remain informed at all times.
Keeping proper records of all the financial dealings of a business is not only prudent and sensible. The law requires that businesses keep such records. These records must be made available whenever certain authorities, such as the income tax department demands it. In some cases businesses are also required to publish their financial status at least once a year. Failure to adhere to the laws can result in severe penalties.
Bookkeeping is not mysterious or particularly difficult. It is simply a science whereby very exact records are kept about the financial transactions of an enterprise. Even non profit organisations need to keep such records. Without such records no enterprise can exist. Owners of businesses need to know where they stand financially at all time. If they do not, they are in danger of making very costly mistakes.
These days most businesses follow a double entry system. This only means that every single transaction is recorded twice. It sounds complex but it is not really. Here is an example. If a business spends some money on buying goods that is meant for sale, then they have an expense. This is negative on the bank balance. At the same time, however, they now have more stock, and this is recorded on the positive side of the books.
Bookkeeping is as old as the human race. Records of transactions have been kept from the earliest ages. Of course, those days when transactions were carefully entered into giant ledgers are now long gone. These days businesses use advanced software packages to keep their books. Most software packages make it easy to compile reports, to correlate entries and to produce information as and when it is needed.
Many people confuse the terms bookkeeping and accounting. A bookkeeping practitioner is responsible for recording transactions. It is not his task to prepare financial forecasts, draw up budgets or interpret the data that he records. An accountant, on the other hand, uses the records contained in the bookkeeping system to assess the current and future financial situation of the organization. He advises management on these matters.
Bookkeeping helps organizations to avoid fraud. In fact, most cases of fraud are only proven once the financial records are studied. Proper records can also help an organization to avoid legal problems and to respond to enquiries quickly. When a business is sold or bought the financial records will play a very big role in the determination of the price.
A proper bookkeeping system that is kept up to date at all times holds many advantages. It helps the owners to make sound financial decisions and to negotiate with banks, creditors and debtors in good faith. Without such a system no business can hope to survive in the long run.
Keeping proper records of all the financial dealings of a business is not only prudent and sensible. The law requires that businesses keep such records. These records must be made available whenever certain authorities, such as the income tax department demands it. In some cases businesses are also required to publish their financial status at least once a year. Failure to adhere to the laws can result in severe penalties.
Bookkeeping is not mysterious or particularly difficult. It is simply a science whereby very exact records are kept about the financial transactions of an enterprise. Even non profit organisations need to keep such records. Without such records no enterprise can exist. Owners of businesses need to know where they stand financially at all time. If they do not, they are in danger of making very costly mistakes.
These days most businesses follow a double entry system. This only means that every single transaction is recorded twice. It sounds complex but it is not really. Here is an example. If a business spends some money on buying goods that is meant for sale, then they have an expense. This is negative on the bank balance. At the same time, however, they now have more stock, and this is recorded on the positive side of the books.
Bookkeeping is as old as the human race. Records of transactions have been kept from the earliest ages. Of course, those days when transactions were carefully entered into giant ledgers are now long gone. These days businesses use advanced software packages to keep their books. Most software packages make it easy to compile reports, to correlate entries and to produce information as and when it is needed.
Many people confuse the terms bookkeeping and accounting. A bookkeeping practitioner is responsible for recording transactions. It is not his task to prepare financial forecasts, draw up budgets or interpret the data that he records. An accountant, on the other hand, uses the records contained in the bookkeeping system to assess the current and future financial situation of the organization. He advises management on these matters.
Bookkeeping helps organizations to avoid fraud. In fact, most cases of fraud are only proven once the financial records are studied. Proper records can also help an organization to avoid legal problems and to respond to enquiries quickly. When a business is sold or bought the financial records will play a very big role in the determination of the price.
A proper bookkeeping system that is kept up to date at all times holds many advantages. It helps the owners to make sound financial decisions and to negotiate with banks, creditors and debtors in good faith. Without such a system no business can hope to survive in the long run.
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