| Bookkeeping is the process of maintaining | | | | known only by regular maintenance of books. |
| books of accounts involving daily | | | | Everything that is paid and received must be |
| transactions. Bookkeeping indicates the exact | | | | updated regularly, in case of cash |
| position of business finances. Bookkeeping | | | | transactions. If the transactions are not |
| can be done manually or through a | | | | purely based on cash, then the invoices |
| computerized system. Manual bookkeeping is | | | | raised or due should be maintained as they |
| doable for beginners and small business | | | | are mandatory records for any business. |
| firms, but as the business develops, a | | | | Issuing or cancellation of checks must be |
| computerized system of maintaining accounts | | | | done with care and in both the cases, clear |
| will be beneficial. | | | | records must be maintained. |
| | | | |
| When it comes to bookkeeping, there are | | | | Thirdly, bank statements should be collected |
| certain things to be taken care of to run the | | | | regularly from banks and should be compared |
| business efficiently. Firstly, it is | | | | with the in-house accounts. This will track |
| essential to maintain an account of income | | | | all the expenses as well as incomes and help |
| and expenses regularly. You can use either | | | | business owners know their exact financial |
| accrual-based or cash-based accounting. In | | | | position. |
| accrual-based accounting, you make note of | | | | |
| the incomes when you get them and expenses | | | | Nowadays, computerized bookkeeping software |
| when you pay them. In cash-based accounting, | | | | is readily available to suit all types of |
| you make note of the incomes and expenses | | | | small, medium, and large businesses. It helps |
| whenever they happen, not when you get or pay | | | | bookkeepers maintain all kinds of account |
| them. In case your business has an inventory, | | | | statements and these details can also be |
| then it is better to go for the accrual-based | | | | backed up in case of computer troubles. |
| accounting, and if not, cash-based accounting | | | | Business people can maintain their accounts |
| will do. | | | | manually or electronically, depending on the |
| | | | size of their business and the volume of |
| The financial status of businesses can be | | | | transactions. |