Accounting Procedures for Small Businesses
No matter how small or how large the business, it is essential to follow the basic guidelines in bookkeeping and accounting to monitor the paying and receiving of cash.
Some business owners feel that if their business is relatively small and making only a tiny amount of income, that there may not be a need to follow the basic accounting principles involved for small businesses.
This is a step in the wrong direction since a company or businesses’ success depends on how it is managed at its infancy, no matter how small it is initially.
Initially it is important to start with laying out what you have in detail. All the factors such as funds on hand and the supplies and costs of these including maintenance and updating and restocking should all be listed, preferably with detailed descriptions. Keep in mind that bookkeeping should also include these detailed descriptions which are written in such a way that they may be easily understood by others. It is always beneficial to have a copy that can be presented in terms of relationship with other accounts as well. The main accounts that should be included in the Accounting and bookkeeping are the equity accounts that go in with the liability accounts, direct and indirect expenses, liabilities and assets.
Sort out these accounts and chart them accordingly. Also understand that the numbers you assign to these accounts should be as easy to follow as possible. Go step by step with the numbering and do not skip or jump from one number to another so that everything is in order and place by place.
Though it is routine to keep these kinds of record on paper, it is also essential to have a softcopy as well. Do your research on the available accounting software’s for small businesses on the internet. There are several choice available, even some that are free of charge. If you feel however that you should purchase a particular brand, by all means make use of this advantage and get the best type of accounting software available. With an already written out and layout draft of what you plan to do with your expenses, it will make things easier for you to transfer the needed information into your software. The software will allow for the specific tracking yet it is still essential to keep a written copy and that both keep up to date with each other. This way you will be able to avoid anomalies and unnecessary discrepancies in your records. Following this is also essential in unprecedented circumstances wherein one or the other may fail due to technical, mechanical or clerical error. At least even when something goes wrong you will still have a record that you can check up on.
Remember that with the proper accounting guidelines comes the skill and capability to actually create these necessary records in bookkeeping. Hiring a capable accountant or doing the research and educating yourself of what is necessary are beneficial to keep you on track with your small business accounting.
- I an exNRI person. Now I settled in Ranni town in PTA dist in Kerala. Now I have lesser time to do small business. But I have no idea to start which business. I need your advise for above. Regards Joseph
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