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Starting a new company can be an extremely stressful time, and there are many things that you will need to take care of before your business is up and running. You will most likely be doing everything in your power to ensure your business success, and this is most important when it comes to your financial records. Not only can bad bookkeeping cause unnecessary legal problems for your business, but it could also result in the failure of your company. In order to avoid this, it is vital for you to know basic bookkeeping for new business start ups and understand the foundations of this.
You may find it more convenient to hire someone professional and experienced who can be in charge of all of your accounts, as you will already have many other things to handle. Be sure to hire someone responsible that you can trust.
Since you are just starting your company, the most common method of book keeping for small companies is the single entry bookkeeping system. The cash book is the main part of this system, which essentially records all of your business revenues and expenses.
Many firms will also keep a petty cash book, which notes down all small sums of money that do not relate directly to company expenses. This is a good idea as you can keep record of how much money is being spent.
These can include buying coffee for your employees, or the expense of holding an office party. It is important that these expenses are also recorded in case the petty cash budget gets out of control.
The most accurate of these will make use of double entry book keeping rather than single entry bookkeeping. The advantage of using computerized programs for keeping track of your financial status is that it removes the many different physical books and papers that you would need to store, making it much more efficient, as well as saving a lot of space. It can be daunting to try to play catch up with your financial records, which is why it is important to update these regularly day by day in order to not fall behind.
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