If you are running a business, working as a freelancer, or a sole proprietor, bookkeeping is a highly essential task for you. This is because you need to keep a track of your financial record and expenses, know whether your business is financially stable or not, and also file the income tax return as and when required. Bookkeeping is a tedious and time-consuming process that requires perfection with the numbers. This is why every business owner should be knowing about its basics. Here is our guide that will take you through the basic concept of Bookkeeping, why is it important, and various terms related to it.
Bookkeeping is the process of keeping a record of a business’s financial transactions and expenses and updating them regularly. A bookkeeper is required to maintain a track record of any transaction or any kind of financial intimation pertaining to business expenses whether the financial transactions are done by a person or an organization. These transactions include sales, purchases, receipts, and payments.
Bookkeeping basically keeps all the records of your business investments, profits, how much money is expected to be received by your business, how much it owes to others, and all the related aspects like keeping records of assets, liabilities, and owner's equity.
There are two major methods involved in the process of Bookkeeping-
In order to keep full track of your business finances and transactions, you need to implement an effective and stellar bookkeeping technique. This goes for every business whether small or big. Poor accounting is one of the major reasons responsible for the failure of many businesses. Bookkeeping provides the right direction for the growth of a particular business. This is the reason why it has become essential to maintain updated financial records for your business. It helps to manage the cash flows and business’s future financial plans effectively.
Bookkeeping can help you answer some of the following questions:
Bookkeeping answers these questions so you can easily choose the right direction to manage your business well and quite effectively.
There are 4 simple steps you need to know in order to handle bookkeeping for your business. These include:
Step 1: Learn and set up your chart of accounts
Step 2: Start keeping track of your financial transactions
Step 3: Adjust your bank accounts accordingly
Step 4: Keep your accounting data organized to review it when you close the month.
Here are some of the terms you need to know in order to have a clear understanding of Bookkeeping.
There are different types of bookkeeping accounts you must know. These include the following:
Hiring a professional Bookkeeping expert is an excellent idea if you want to manage your financial transactions and expenses effectively. A good and reputable bookkeeper can lower your stress of managing your business finances and help you in getting long term success for your business.
If you want to become a professional bookkeeper in Canada, then Get Trained Get Hired can help you out. We provide an online bookkeeping course and training that will help you start your own bookkeeping business and become an expert bookkeeper in the industry. You can contact us today at 647-870-6986. Our experts will get back to you as early as possible to help you out.