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