Bookkeeping is an accounting function that records every financial transaction of a business. It is one of the key roles of a bookkeeper, responsible for ensuring proper accounting services for the company’s money and operations. It also helps to identify errors and irregularities in the accounting process.
Many bookkeepers also assist clients with tax planning, payroll services, and other financial needs. Bookkeeping can be complex, but with the right planning, it can become simple. In this blog, we talk about Calgary bookkeeping basics for small business owners.
The Basics of Bookkeeping
A business’s financial records are vital for business survival and growth. As a business owner, it is important to have an accountant or bookkeeper for the task. You can use accounting software or services to track business transactions and prepare financial statements. But you need to know accounting basics to manage your business finances effectively.
– Start with keeping accurate records of business transactions. This includes tracking income, expenses, and profits.
– Track cash flow with accounts payable and accounts receivable. Use these two accounts to track the cash coming into your business and cash going out of it. Track the value of inventory with an inventory record.
– Finally, enter all the information into a computerized accounting system. This will enable you to easily access and analyze your business’s financial information using a computerized accounting system.
Recording of Sales and Income
Bookkeeping is an essential part of business accounting. With bookkeeping, business owners can accurately track their income and expenses. Plus, it gives business owners a clear picture of their business’s performance over time and can help them make informed business decisions.
To properly keep track of sales and income for each business day, you need to follow a few steps. Firstly, record the sale price, date, time, and customer information on the receipt. This will provide accurate information about the sale when reporting to the tax department or financial institution.
Secondly, enter payments into your accounting software. This will enable you to track your business’s transactions in one place and provide a detailed overview of your finances.
Thirdly, track expenses using your business’s budget. This will help you stay within your financial limits and ensure you take on only what is necessary.
Finally, file your taxes using proper tax forms and information. This will allow you to accurately account for any income or expenses and avoid mistakes or confusion.
Recording of Expenses
As a business owner, one of the most important tasks is keeping accurate records and filing tax returns. Ideally, bookkeeping should be done by a professional accountant, but it can also be done by a skilled bookkeeping professional.
A Calgary professional bookkeeper can assist you in creating, tracking, and analyzing all financial aspects of your business. They can help you plan and track your business’s finances and make sense of various business-related information and data.
One way to begin bookkeeping is to set up a system that tracks expenses by category. This will help you develop a budget for each category and ensure that funds are used efficiently and appropriately. It will also prevent you from making costly mistakes or letting your business slip into debt. A bookkeeping professional can also help you analyze your income statement and balance sheet to identify areas of improvement.
Receipts and Expenditures Checklist
– Log all incoming and outgoing money in a business bookkeeping system. This will help track income and expenses for tax purposes, as well as for business planning and budgeting.
– Record the date, time, and amount of each purchase. This will provide a comprehensive record of your business’s financial activities. It can help identify trends and make business decisions, such as investing money or saving it.
– Enter income and expenses from your business’s main sources of income (such as sales, services rendered, or rental income). This will provide an accurate picture of how your business is performing. It can also help you identify ways to increase revenue or reduce costs.
– Track your net worth at regular intervals. This will allow you to track the financial health of your business over time and make adjustments when necessary.
A bookkeeping system can help small business owners easily and accurately track their finances. By using a bookkeeping system, small business owners can ensure they are accounting for their finances accurately and efficiently.
Bank Reconciliation Checklist
As a business owner, it’s vital to keep tabs on your finances and ensure that the books are balanced. However, this can be a daunting task for small business owners. Here are some tips for bookkeeping in Calgary to make things easier for you.
– Make sure your bank statements are accurate and up-to-date. This will allow you to easily track your business’s finances. – Reconcile your bank accounts for the current month. This will help you identify any cash flow issues early on and take corrective measures. – Check your credit score and credit history to ensure no outstanding debts. This will help you monitor your financial health and prevent debt emergencies. – Review your business’s income and expenses to comply with tax regulations.
While doing so, consider making any necessary adjustments to minimize tax liabilities. – Prepare a list of any abnormal transactions or changes that may have occurred during the month. This will help you identify possible issues and take remedial action quickly. By following these tips, you can keep track of your business’ financials smoothly and efficiently
Conclusion
Bookkeeping is a crucial aspect of every business. It ensures that the business operates efficiently and adheres to financial processes and systems. If you’re looking to get bookkeeping services in Calgary, we can help. Our professional Calgary accountants are experts in bookkeeping, and they can offer guidance and advice on bookkeeping systems, regular audits, and more. Contact us today for a free consultation!
