A successful business is made of a good idea, the right market for that idea, a huge amount of dedication and hard work – and accurate bookkeeping. As near as anyone can tell, the practice of bookkeeping may have originated about 12 thousand years ago, and not much has really changed. Bookkeeping is one of the big reasons for a firm’s success, but it can also be one of the most misunderstood and neglected aspects. Knowing the basics about documenting the financial side helps owners and managers decide how to tackle this situation and help their business grow to its greatest potential. Here, we take a look at the basic types of bookkeeping, and the ways they’re implemented in modern business practice.
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Go Figured Bookkeeping is ready to be your financial documentation partner. With our dedicated focus and our years of experience, you won’t find better and more trustworthy assistance. It’s easy to get started. Call us on 07 3608 4206, e-mail [email protected] or get in touch online.
Single-Entry Bookkeeping
The simplest form of bookkeeping, and the easiest to initiate and maintain for a small business, where time is at a premium and staff may be limited. Each transaction is recorded in the ledger once, as income or an expense. At any time, the result of these additions and subtractions shows an available balance, and the owner can see where the business stands. It is not too much different to balancing a personal chequebook, and when done correctly it will provide a basic picture of the activity and health of a straightforward business.
Double-Entry Bookkeeping
A little more complicated, but also the most widely used form of bookkeeping. Each transaction is recorded as both a credit and a debit – that may seem counterintuitive at first, but it soon becomes clear how much more accuracy this method provides when financial transactions get more complex as a business grows and expands.
For example, a bank loan to a business is a credit to the cash account of the business, but also acts as a debit to the business because it has to be paid back. For the bank that made the loan, it’s the other way around – the loan is a debit to the bank’s cash, but it is also a credit as a receivable. Credit and debit accounts can be set up to describe and accommodate all aspects of business activity, so a much more detailed picture of a firm’s ongoing cash position and its assets and liabilities is made available. In double-entry bookkeeping, the credit and debit sides must always match – any discrepancy points to an error, and can be even evidence of fraud.
Making It All A Little Easier
Computers are ideally suited to simplifying both types of bookkeeping. Their speed of calculation and accuracy of results go a long way to fix the most troublesome aspects of manual bookkeeping. Excellent bookkeeping software is available at a reasonable cost, and the process can be standardised for any form of business undertaking. However, both types of bookkeeping will still require understanding, knowledge, and skill – and the task has to be executed faithfully for the entire life of the enterprise.
Call In Professionals
For a business of any size, there is a lot to be said for putting bookkeeping into the hands of experienced professionals. They do not have to manage and deal with the day-to-day issues of running the business, so they can concentrate on doing the books in the best way possible. This gives the firm’s executives the peace of mind and the freedom to concentrate on making the enterprise the biggest success that it can be. Professional bookkeepers will also be a great help at tax time, in ways that are self-evident, and in ways that can’t be anticipated until the time comes.
Don’t Go It Alone – Choose Go Figured Bookkeeping
Give your growing business the boost it deserves, with top-quality professional bookkeeping. Keeping your firm’s financial house in order has never been easier. Find out everything Go Figured Bookkeeping can do for your enterprise. Contact our friendly, knowledgeable staff by calling 07 3608 4206, e-mailing [email protected], or get in touch online.