Record Keeping

by Norma

Why New Businesses Keep Records

NewBusinessRecordKeepingGood record keeping shows how a business is doing–it’s profitability, items selling,  and services being used for instance. Business owners utilize records to analyze status and pinpoint what changes or improvements to make. Keeping good records is vital for your business success.

Before the paint dries and the doors open, a small business starts to leave a paper trail of  documents and business operations–receipts, bank transactions, purchase orders, maybe even revenue. Before long, you’ll be called on to show your income sources and expenses, as well as employee-related records, including all employment taxes. OSHA also has record keeping requirements. Before the year end, you’ll start to wonder how your business is fairing–are you still on track or gotten off course somewhere along the way?

Expenses, payroll records, receipts, bank statements, accounts receivable, and accounts payable are some records businesses must retain in a detailed, consistent, and timely manner, regardless of the type of system you choose to use. So before you mis-place any important information, you need a system for recording and tracking–well, everything.

While it’s still viable to maintain tried-and-true ledgers using the proper forms purchased at a stationery store, more small businesses have turned to the convenience of computer software for  bookkeeping and record keeping chores.

If you do choose to use a computer software program to record revenues and expenses, take time to examine serveral possibilities before you make a final selection. Start by looking at some of  these:

  • Quicken by Intuit (Single-entry accounting);
  • Microsoft Money (Single-entry accounting);
  • Quickbooks from Intuit (Double-entry accounting);
  • Peachtree Accounting from Sage Software (Double-entry accounting).

All the above software is available at Amazon.com together with reviews that may help you narrow the field.

If you sell products, you’ll need good inventory records for managing sales, inventory holdings, tracking buying trends, seasonal activity, and theft. These records let you see stock on hand vs. the stock purchased, purchase dates, prices, sale prices, and sold information. Again, stationery stores carry the ledgers or note books to keep track of your inventory. Many businesses choose to rely on inventory software packages.

Quick Books, Microsoft Money for Business and Peachtree among others produce stand-alone inventory software.

Tips:

Most small businesses use a revenue and expense journal (single-entry method of accounting). Others use a complex double-entry system which records debits and credits for each entry.

Many new business owners prefer spending their time on other aspects of their businesses instead. Others may need a professional to set up an initial records/bookkeeping system. If that’s you, hiring someone with bookkeeping skills for a few hours per week, may be the best solution.

If you’re looking for the services of a CPA, check out the  AIPCP site

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