The rapt of this article is to discourse the motives and importance of updating the Accounting books for Small Businesses that exist in the market.
All you small businesses start-up out there, who dream to be king-sized in the near future, you must know that keeping your Accounting books updated can fetch you unexpected feats. The success might come in tiny quantities but will surely become bigger eventually. Updating Accounting books for small businesses might sound to be a very small step, yet is a very crucial one.
So, why do you need to update Accounting Books for small businesses?
Afore this you must to know what are the major contents of a set of accounting books for small businesses:
- Cash Book
- Bills Payable / Bills Receivable
Let us now converse as to why it is necessary to update these accounting for Small Businesses Books (especially sub-journals and Cash book):
- It is suggested that small businesses ought to maintain separate accounting books for different transactions. These vivid books are even known as Sub-Journals.
Now, accounting for small businesses becomes much simpler when the business owner understands the advantages of Sub-journals:
- Since the recordings of transactions keep happening simultaneously in different books, it tends to save up a lot of time.
- Accordingly the Sub-journal in accounting books of small business can provide information for each and every petty dealings if required.
- Trial Balance preparation turns out be a doddle, as there are various Accounting books and hence each personnel can carry out his job with each book.
- When it comes to accounting in small business, it is vital to pay good attention to your cash book. Small Businesses generally incline to have a lot of pint-sized transactions on a daily basis, therefore cash book has its own prominence. In this book, you can enter numerous transactions with not only the figures but also with the explanation.
- In Accounting Books of small businesses, a cash book archives entries straight from transactions, thus there is no requirement of maintaining a separate Prime entry book.
- Cash book also allows double entry purpose of cash and bank columns, as a result you have a transparency on your funds in bank and cash at hand.
- For simple Accounting in small businesses and to take off a lot of load from the cashier’s plate, it is advised to maintain your Accounting books.
- In accounting books of small businesses, if the individuals are keen enough to have effectual control over the tiniest payments, Accounting books are important to be updated.
- Since, each payment is backed by vouchers, and vouchers are checked repeatedly, it is essential to note that by end of each balancing period, one will be able to detect deviations if any during accounting in small business.
- Helps to avoid duplication of task as the entries need to be made in the cash book and not in the Ledger.
- Apprising Accounting books in small business also creates clarity to the outer world like the tax receivers, clients and banks, which in turn increases their confidence on you.
- It also saves upon a lot of time in retrieving data about your business as and when required.
These were few logic's as to why small businesses should never fail to update their Accounting Books.
Source: IBN Tech blog.