One of the most feared as well as least understood systems in a business is the system of bookkeeping or accounting. The reason for this could be that most people are apprehensive of the work involved in setting up such a system and the monotony of plugging in daily inputs to keep the system alive.
But if you look at it closely, there is nothing too complicated about bookkeeping. It is just like maintaining a personal diary or your check book. To put it simply, it is nothing more than keeping a tab on your income and expenditure on a daily basis.
The first step to get going is to open a business account for your new business enterprise. This is a simple procedure involving your requesting the new accounts teller at your local bank for a new business account and sent the new account registration fee to the relevant commissioner. You are ready with your new business account with freshly imprinted checks.
The next step is to pick up a note book with loose leaves and a supply of paper. It is also a good idea to use index tabs which separate the months or even to create separate accountings for all the items you sell.
What you do at the end of the month is to transfer this daily information to one of the cheap bookkeeping registers from where your tax consultant or accountant can work. These professionals usually do not work with your daily register but would rather take information from the official bookkeeping registers. They will not even transfer the information on your behalf. If you ask them to, then charge a hefty fee to do this. It is truly no big deal, and spending a few minutes on the last day of the month, you could transfer the details yourself. When you are preparing to pay your tax returns, simply hand over this bookkeeping register to whoever is compiling your tax liabilities and you are free.
The bookkeeping register need not be anything complicated, the simple “Economic Register, Form RL-17″ columnar note book which are commonly used can suffice your needs. Such registers are available in a variety of styles and sizes from Economic Systems-PO Box 11413-Tacoma, WA 98411. You essentially need a notebook with columns demarcated. Put a title on top of each column to represent the money transactions related to that product or services as specified by the column. At the end of the month simply add up whatever figures appear in the column and you will know in a moment how much money you made against each of the products or services that you are dong business with.
After the date column record the expenses or the money spent. Put a title on top of each column and insert the figures which are relevant to that head. At the end of the month, simply add up the figures and you will know your total monthly expenditure. When your expenses are more than your earnings, obviously you are running at a loss. The vice versa is true to know how much profits you have made in a month.
The two important points to remember is that bookkeeping or accounting can be kept simple and uncomplicated when all you do is to go on recording your business activities and keep the book updated.
By: Guy Starbuck