Thursday, April 9, 2009

Book-keeping Basic Tips

Reasons for keeping books

Legal Requirement - under the new system of self assessment, the keeping of books is a must and it's illegal not to.

Control of Business - It's almost impossible to know whether you are winning or losing, have to pay bills, people owe you money, etc if you don't keep books

Cheaper Accounts - well presented books will reduce accountants bills but check with them that the method you intend to use is the best for both of you - often they may have a system that they prefer or software they can download to your computer to use.

If you Sell the Business books are necessary to indicate the value and worth of the business

Finance - If you require loans or finance you will need to show books

VAT / PAYE - records need to be kept for inspection

Methods for keeping books

Patented System - such as Simplex, Everite, Collins, etc. usually 52 weeks plus Profit and Loss Account as summary

Analysis Book - Can be adapted to own requirements

Double Entry System - Involves Ledger Cards and works on the same system as computerised accounts

Computerised Systems - a wide variety available such as Sage, MYOB, DO$H, etc a download of a free, single user book-keeping system is available through

Your Own Method - using a note book or folder. Just ensure that al incoming go on the Left side of the book and all outgoings are entered on the Right side of the book.

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