Bookkeeping is the process and practice of tracking and recording all financial transactions of a business.
A few key tasks for any business include:
1) Documenting EVERY financial transactions (both income and expenses)
2) Recording all debits and credits
3) Sending invoices and processing payments
4) Processing bill payments
5) Preparing financial statements (i.e. balance sheet, profit and loss, and cash flow)
6) Maintaining and balancing a general ledger
7) Reconciling banking activities
8) Completing payroll functions.
While the basic concepts are straight-forward, as businesses have become more complex, their bookkeeping has followed suit. Having accurate financial numbers is not only important for taxes, but it is also important to have accurate financial numbers to make decisions for the business. Is the business making money? What aspects of the business are bringing in income? What areas are losing money? What is the cash flow for the business?
Strong bookkeeping contains consistency, accuracy, and a strong level of attention to detail. Good bookkeeping is vital for any business and there are many resources for business owners including education, training, software programs, and professionals. Bookkeeping creates a piece of mind and provides the foundation of financial stability for any business or entrepreneur.
A few key tasks for any business include:
1) Documenting EVERY financial transactions (both income and expenses)
2) Recording all debits and credits
3) Sending invoices and processing payments
4) Processing bill payments
5) Preparing financial statements (i.e. balance sheet, profit and loss, and cash flow)
6) Maintaining and balancing a general ledger
7) Reconciling banking activities
8) Completing payroll functions.
While the basic concepts are straight-forward, as businesses have become more complex, their bookkeeping has followed suit. Having accurate financial numbers is not only important for taxes, but it is also important to have accurate financial numbers to make decisions for the business. Is the business making money? What aspects of the business are bringing in income? What areas are losing money? What is the cash flow for the business?
Strong bookkeeping contains consistency, accuracy, and a strong level of attention to detail. Good bookkeeping is vital for any business and there are many resources for business owners including education, training, software programs, and professionals. Bookkeeping creates a piece of mind and provides the foundation of financial stability for any business or entrepreneur.
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