Bookkeeping plays an important role in managing business resources. Naturally, you need these transaction records in times of tax schedules and inspections.
Whether you are doing it along or you decide to hire an expert that will track everything, all we can say is that you need to understand and learn bookkeeping basics.
Keeping an organized record in all of your business operations will alert you on any issues in the cash flow and possible problems in legality if any.
Not just that, with an arranged record that is updated, this will help you prepare your annual tax in a much easier process. Below are the basic recordkeeping for your books.
Business Expense and Revenues
All of your business transaction should be documented, in other words it should be written in the records. You need to have a record on the amount of money coming in and out and where funds are spend.
The importance of recording business cash, the accurateness of the annual expenses, writing the reimbursable bank checks and creating a detailed record on petty cash are significant in documenting business expenditures
The record on all of your business assets and the products should have a regular records tagged as inventory. By having this, it will help business owners forecast for the next year by simply tracking data trends, it also an effective way to prevent stealing and the misplacing of the merchandise and keeping the holdings of the inventory to minimum.
With your inventory record, it will help you determine the product purchased dates, the stock numbers, the purchase price, the dates products are sold, and the possible sales price that are relevant on the records listed in your inventory.
You need separate business and personal finances.
The Payable and the Accounts Receivable
You need to keep tract to everything, keeping a record for what clients owe on your business and debts that you have to pay from others.
It is practical for you to record all data as possible including dates, amounts, invoices details, terms, numbers and the amount that are paid or balances, due, and the information of the payments in real time.
Even by hiring a single employee has big responsibilities for business owners. These include pay forms, the payroll taxes and other tax obligation to be catered by the employer.
As employer you are then responsible in maintaining the forms of the employee like the withholding certification for allowance and eligibility verification on their employment.
You are also responsible for their records on employer matching, unemployment, workers compensation and withholding.
If DIY bookkeeping is your plan, the best thing that we can suggest is to consult first with a professional or a person that is expert on it, this is to make sure that you are doing the right thing. So as the business grows, you can utilize the use of bookkeeping software.
Preparing Tax Time
With business books updated an in order. Tax preparation is obviously at breeze. With records in order, this saves you from trouble in figuring things out.