Guide on Bookkeeping and Money Management
Bookkeeping also refers to the activity or occupation of keeping records of the financial affairs of a business. Some of the common transactions that are recorded in bookkeeping includes acquisitions, receipts, sales and payments by an individual or an organization or corporation. Single-entry bookkeeping system and the double-entry bookkeeping system are the most commonly used types of bookkeeping. The process of recording financial transactions of a business is mostly done by a professional known as a bookkeeper who records the day to day monetary transactions of business.
Financial advisors do recommend businesses owner to keep record of their financial transactions due to the following reasons. When a company keeps a record of its financial transactions, and it becomes easy to keep track of its finances as opposed to the one that does not. Besides, it provides systematic up to date follow-ups and on time payments of goods and services provided by the suppliers. On the other hand, Bookkeeping keeps track on any information and documents to accomplish annual taxes. Through money management, business is also able to compute the tax returns. Suppose a business wants to provide crucial information to its investors, then it becomes easy since the information on the financial transactions is well recorded through bookkeeping. A business that incorporates bookkeeping and money management strategy Is in a better position to plan its strategies well and also keep records of its transactions as required by law.
For an individual, money management provides security of being in the know of the resources that one have to counter unforeseen expenses including being fired from work, car breaking down and other unexpected expenses. Also, efficient money management helps in reducing stress and conflict. As your incomes grow, your financial planning will not just involve budgeting so that all the expenses are covered each month, but also determining how to invest the surplus that accumulates above what you spend. Through efficient money management, one can achieve their planned long-term goals including buying a house, starting a family and saving for all the things they hope to achieve in the near future. Likewise, properly managing your money enables you to pay them off and ease your dependency on them, in addition, those school loans will seem less of a burden once you factor them into a budget that you can comfortably adhere to.
For effective money management and bookkeeping, it is essential to follow the following guides. It is vital to learn how to use the accounting soft wares such as QuickBooks since it contains relative information on how to create financial report, reconcile bank and other financial computation. In addition, one can choose to consult a local bookkeeper who will offer the services they need, and turn the books over to a certified public accountant for planning and tax preparation at the end of the year. It is vital to have different account, a personal account, and a business account.