If you are a business professional, whether your business is for profit making or not and you probably do not care about what comes in and what goes out of the business, you are not doing the business any good. An important part of any business is knowing what comes in and what goes out of it including a record keeping of the same. Accounting is a silent factor that can either make or break your business. If you really want to grow your business to a bigger business, then you would start taking accounting very seriously.
Bookkeeping in accounting is just a small fragment of financial management in general every woman is expected to know, because it is a great place to start especially for business personalities who desire sustainable growth in their business. Bookkeeping accounting is all about recording and maintaining financial books/records. If you are making plans to grow your business, there are certain books you must consider to keep, such as:
- Cash Book: a book in which receipts and payments of money are recorded.
- Credit Book: record with the list of people owed by the business.
- Debit Book: record showing the list of people owing the business.
- Payroll Records: a book that tracks the number of hours worked, gross earnings, deductions and net pay.
- Sales Invoice: An evidence of primary sale or product and service for seller and buyer.
- Cash Receipt: The record when a cash payment has been allocated for the sale of a product.
- Profit and Loss Account: a financial statement showing a company’s net profit or loss in a given period.
- Stock Book: a book used by a business to keep records of quantities of goods acquired, held in stock, and disposed of.
- Asset Book: A book containing assets tracking details, codes, and asset description, including specifications.
- Cash Payment Vouchers: A document which can be used as proof that a monetary transaction has occurred between two parties.
- Bank Statement: a printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account.
Eight Importance of Bookkeeping accounting to any business.
- It helps you manage cash flow which is an important aspect of management, and without a proper cash flow in business, the efficiency level will drop.
- In evaluating the performance of your business, bookkeeping accounting will be a great tool to start with.
- It helps you build a better business team who work on budget and schedule. When business team knows the company’s budget they work with better information at hand.
- Proper bookkeeping accounting is also a great help in comparative analysis of your business, performance of last year compared to this year and so on. It’s a great tool for business analysis when analyzing your growth rate or performing a simple audit.
- In making a long term plan, bookkeeping accounting ensure you have the right tool at hand. It also helps you set further goals for the business.
- Bookkeeping accounting helps your employment plans. It will help you know if you can pay another staff.
- Bookkeeping accounting helps you plan ahead for your business. It helps in budgeting/forecasting whether for sales, expenses, purchases, stock level, and other business plans that require statistics.
- Bookkeeping accounting helps your business meet deadlines, make timely payments, rents, bills, taxes and so on.
Learn to practice bookkeeping accounting in your business, it goes a long way to track the progress of your business. It is definitely not a bad idea to know a little about something as important as this!