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Once your business is up and running, it is important to keep your accounting and financial records updated. Start by setting up a basic bookkeeping system, choose the payment methods you wish to offer, and learn how to write receipts, invoices, and itemized billings and develop the financial statement.
If you have any question, please do not hesitate to contact the BSU team to set up a meeting with our tax/accounting advisor for free.
What is a bookkeeping system?
A bookkeeping system contains ledgers (records) that records all accounting transactions: sales, expenses, payrolls, cash/banks, accounts receivable and payable.
Why do you need a bookkeeping system?
A bookkeeping system can help you keep records for various reasons. These include analyzing business activities, attracting investors, seeking finance, recording and paying taxes as well as meeting your reporting requirements.
Is it required by law?
Under tax law, you're required to keep records relating to income tax, VAT, payments to employees and business payments.
How do you set up a bookkeeping system?
It might be difficult to set up your own system without an accounting background. If you need help getting started, contact your accountant, bookkeeper or business advisor. Once your system is set up, with the proper training you can take control of your finances.
It is important to consider what payment methods you will offer when you start your business, and review it regularly to see if you are keeping up with your customer's payment preferences and if you are meeting the needs of your business.
Before you can collect payment, you may need to provide the customer with an invoice outlining the goods and services that you provided.
Once payment has been made you'll also need to offer the customer a receipt confirming their payment of goods or services.
The significance of financial statements lies not in their preparation but in their analysis and interpretation. The analysis and interpretation of financial statement is the comprehensive and intelligent presentation of information that helps the interested parties for judgment and decision-making. Download the Different Financial Statement Analysis Types.
Once you developed your financial statements, you can analyze your business by using a number of key financial ratios. It is important to compare your ratios to benchmark industry ratios. Learn about the Different Financial Ratios and their Analysis.
To develop your balance sheet and income statement, you can use these templates Balance Sheet Template an Income Statement Template.