The BizFilings blog covering business tips and trends.
Getting and Keeping Your Financial Books in Order
Published on Feb 26, 2010
Read 'Getting and Keeping Your Financial Books in Order' at 'Time to Start Up,' the small business blog by BizFilings.
There are dozens of reasons you might be excited about starting a new business—and it's a good bet that the opportunity to keep financial records isn't one of them. As a result, this crucial element of business success often takes a back seat to more glamorous tasks.
Setting up your financial books in an organized manner is one of the important first steps a new business owner can take—and one of the most commonly ignored. Even if your business has an accountant, it's essential that you know something about basic accounting principles as well. Accountants rely on receiving accurate and well-organized information, and the day-to-day bookkeeping on which that information is based will most likely happen in-house.
The key is to develop good record keeping habits from the very beginning. Start by familiarizing yourself with the basics of bookkeeping. In most cases, with a little study and help from computer software tools, you should be able to manage your most basic financial records. This includes the daily recording of transactions, maintenance of a general ledger, and maintaining your cash records. There are some other records you may need to maintain, depending on your business, such as accounts receivable ledgers and accounts payable ledgers.
Once established, accurate financial records are a gift that keeps on giving. Are you making money, or losing it, and how much? Is your business on sound financial ground, or are troubles lurking ahead? A sound bookkeeping system will help answer all of these questions and more.
Taking this end of the business seriously right from square one is one of the best investments of time and attention a small business owner can make.
Readers—what is the most helpful program you've found for record keeping? Post your suggestions or recommendation in the comments!