People have been doing business for thousands of years and one of the most common practices of business during the early times was the trading of goods in exchange for items such as food, tools, or even money if any currency exist during that time. Although, not many techniques exist during those times in order to keep financial records of what was lost and what was gain after the trade. Records have been found dating back to nearly 7000 years when trading of goods was record in ancient Mesopotamia.
Importance of businesses:
In today’s modern world, all types of businesses exist around the world such as corporate businesses, nonprofit organizations, partnerships, and even sole proprietorships. Even a small startup business on average can make up to $70,000 annually. So, it is very important to have an efficient and accurate financial record for keeping the business booming and making as much profit as the business can.
Bookkeeping in a business:
In order to keep a record of the finances within a business, bookkeeping is considere as one of the best techniques use in all kinds of businesses today for daily financial records. Bookkeepers are directly answerable to the owners and managers of the businesses to help them make financial decisions base on their financial records. We at O’Connell, Pace and Company provide you with the best professional bookkeeping services in Hartford for our clients to stay update with their daily loss and gains. Many companies provide automatic bookkeeping services within their system but that could result into many complications for the clients and their financial records could mess up causing nightmares for the business owners and managers. We at O’Connell, Pace and Company provide you with manual services, while our efficient system keeps your records safe and easy to access at any required time.
Types of bookkeeping techniques:
Before you begin bookkeeping services for your business, it is very important to decide which kind of bookkeeping technique is the most effective, depending upon the daily transactions and the revenue generate by your business. If you’re a startup or a small business, you might face complications if you choose a complex bookkeeping system right from the start. While basic bookkeeping methods will not be effective enough for large businesses that have been running for years. Few techniques of bookkeeping are list below:
- Single Entry Bookkeeping:
This is the most basic system of them all where every transaction is record as a single entry, which is maintain in a cash book. No accounting experience is require for this basic single entry method and it is only suitable for small startups of private companies or sole proprietorships.
- Double Entry Bookkeeping:
With this method, every business transaction is record in two terms of debit and credit. For example, if you make a transaction of $200 from your account then your account will be debit and your sales credited as well with $200. It is very important that your debit and credit, both sides are balance with the same amount. This method is the most suitable for large businesses and also the businesses which generate revenue through buying and selling goods or items.
It’s not just about the Finances:
Along with bookkeeping techniques and methods, other wide varieties of tasks are very important to be perform within your financial records such as tax remittance calculations and/or budget preparations. Tax remittance means when a company collects cash that has to pay to the government or tax collectors. So, along with maintaining financial records with bookkeeping, it is very important to calculate and generate the taxes that have to be paid to the tax collectors or the government for running a business.
Budget preparation is the technique of estimating the revenue generate as well as the company’s expenses over the next period of time and this is evaluate every now and then after a certain period of time. It is an important task conside as a part of bookkeeping so that progress of a business can be track easily along with accurate calculation of revenue and expenses.
Certain goals and targets are set up by a business that they are wanting to achieve within a specific time limit and these budget preparations help the business to reach those target goals at a given time period. Keeping in mind all the techniques and the requirements within a bookkeeping service, we at O’Connell, Pace and Company consider ourselves the best of both worlds, providing professional bookkeeping services and keeping in mind all kinds of requirements of our valuable clients about tax remittances, budget preparations and other services involved.