Why You Need Book-keeping
If you are about to begin a new business, it is not wrong to be enticed about the very idea that you will be doing something fresh for yourself. Having a new business brings about enthusiasm especially because you are beginning a new endeavour. But then again, it is not just about the excitement that you get because of your new business. It is also about your responsibilities on knowing different matters that are related to accounting. Most of the time, accounting is mistaken for bookkeeping, when they are different.
Let us view bookkeeping first. Once you have accomplished activities on a daily, weekly, and monthly basis, you have to put them in a record. This record is known as bookkeeping. It is recorded whenever you spend something. Also, it is recorded whenever there are services or goods that you acquired. By means of bookkeeping, you are keeping track of how much you profit and how much you lose. With this, you can have the best glimpse of the outcome of your venture. It is much more generalized, showing rough figures and projections.
Tracking Your Expenses
In order to determine the cost of the sold goods and services, tracking every expense, sale, and purchase you had is a very essential factor to consider. Later on, what you recorded will also help you on figuring your taxes. Individually, every day, every week, and every month will give you a closer look to the progress of what you are venturing for. As long as you have kept the records straight and without any alterations, you know for sure that you are hitting the right bull’s eye when it comes to your business.
On the other hand, accounting as distinguished from bookkeeping is the system of setting up and maintaining the records that need to be analyzed. It is more detailed and records are more scrutinized, this distinguishes it from bookkeeping. Accounting lets you know how far you have gone financially and where you are heading. By and large, accounting aids you in placing each monetary piece on its proper financial place.
The professional individual who performs accounting functions is known as an accountant. For you to get on the right track, it is best to ask for the assistance of a CPA or a certified public accountant. If you do not like the idea of tax issues, then you have to keep your business on track by means of accounting.
Bookkeeping and accounting together pave the way for you to see the real picture of your financial status. Always keep in mind the uses of bookkeeping and accounting because your business can flourish or diminish in relation to how these two finance monitors are concerned.
