WHY TO PREPARE AND MAINTAIN BOKS OF ACCOUNTS
As soon as an idea to start a new business clicks, the first thing that should pop up within your mind is to how to keep records !
Based on the nature of the business, elaborate the requirement of financials books to be prepared for maintaining a rigorous track of financial activities. By keeping your books organized, you can take control of your finances and make quick &smart decisions.
Brainstorm on below major decisions before starting to write financial transactions for any business:
- Which Accounting Method should be adopted :
- CASH BASIS
- ACCRUAL BASIS
- How to record the transactions :
- MANUAL WRITE BOOKS OF ACCOUNTS
- HIRE AN ACCOUNTANT
- USE ACCOUNTING SOFTWARE
- Setting up Chart of Accounts :
- A chart of accounts is a tool that gives a list of every transaction your business makes.
- Be sure to update the chart of accounts often so that all business transactions are included.
- Opening bank account for the business :
- This will allow you to keep your business finances separate from personal money and help in filing tax returns.
- Determine your payments terms :
- Any sales to be made on credit shall be tracked by setting up an effective system for sending and recording invoices and include payment terms on each invoice you send.
