Bookkeeping basics are at the centre of all your small business accounting reports. Without the basic bookkeeping, you will not be able to keep control of your company finances and produce useful management reports. There are two different types of accounts you can use, these are single-entry bookkeeping and double-entry bookkeeping.
It is easy to forget to complete bookkeeping basics while you are so concerned about getting the sales and delivering the goods or services on time. However, it is important. If you do not keep your basics of small business bookkeeping up-to-date, you may miss invoicing a customer, forget to chase up payment or end up paying bank charges if you go overdrawn.
Moreover, remember, whether you are self-employed or Incorporated at Companies House, it is a legal requirement to keep accounting records and store them for a minimum of six years.
If you have never done bookkeeping before, you may find a couple of simple books helpful to get you started with the basics. Here is a couple we recommend to get you up to speed with all the basics:
These books are targeted at people who need to learn the basics without being swamped with too much bookkeeping information. The books are simple to read, present their information in a simple way and are a useful ongoing source of reference.
Decide how often you require your small business bookkeeping and accounting records. It may be that you prefer to do little and often, maybe each day set aside some time to ensure that your small business bookkeeping basics records are up-to-date. A simple five minutes each day can be a lot easier to manage than half a day of headache at the end of each month.
If you are VAT registered, your business will need to provide sales and purchase history when the VAT return needs completing.
Your bookkeeping will be used to provide business accounting basics reports - Financial accounts and management accounts. These accounts will help both you and other people make financial decisions regarding your business. The more up-to-date your books are, the better handle you will have on your business.
If you are already up to speed with bookkeeping basics, but in need of some tips to help you, here are a few tips to keep your books up-to-date:
There are many small business tasks which need to be completed for business bookkeeping. We have produced guides with the basics on each topic;
If you wish to learn the basics of bookkeeping, there are a few alternatives: reading books and running through training exercises is a good way to get you up to speed with the basics relatively quickly.
Alternatively, there are several courses available - from bookkeeping for beginners, A-level Accounting or the more advanced accounting qualifications such as ACCA or CIMA.
Talk to your local college or look in your local library for bookkeeping and accounting courses. In the long run, if you are planning to do all your bookkeeping yourself, this may save you time and money.
Even if you are not planning to do your small business bookkeeping yourself, it is worth spending time learning the simple bookkeeping basics yourself so that you can understand the basics of the bookkeeping records created for your business.
Handing your small business bookkeeping over to a professional bookkeeper or accounting technician can be a useful way of freeing up your time and getting a professional to provide you with your management accounting information.
There are lots of people out there who could assist you with your business bookkeeping. Read our guide on what does a bookkeeper do? to find out their duties and how to find a good one.
There are several options:
If you don't want to use a computer system, you can use some simple bookkeeping forms.
There are ledger books you can buy which will help, or you could start your own books. If you are after bookkeeping stationery for your manual records, Amazon can provide you with everything you need.
However, you will find that paper-based records are more time-consuming to complete and will not give you the same flexibility as a computer system when compiling management accounts.
If you are looking for some simple basic bookkeeping forms, there are Excel bookkeeping templates which will enable you to complete simple accounts. We have produced a range of simple to use free Excel spreadsheets templates to help keep your books up-to-date.
There are many bookkeeping packages available, such as QuickBooks and Sage. There are even free bookkeeping software downloads, including Microsoft Office Accountant Express Edition. Have a look at our business accounting software review section for more information.
We've written a free bookkeeping basics guide to help people who are considering starting a home based bookkeeping business.
Written by a qualified accounting technician who has run a home-based bookkeeping business, the guide looks at the benefits and disadvantages of running your own bookkeeping business, how to find customers and how to price yourself correctly. Read our guide on how to start a bookkeeping business.
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