Steps To Starting A Small Business
Step 7: Setting up your basic bookkeeping system.
Your bookkeeping system is a tool that lets you know how well your business is operating and provides information necessary to prepare financial statements, submit tax returns, apply for bank loans or government assistance, and make sound decisions about every area of the business. Unless there is a way of keeping track of commitments, income and expenses, there is a good chance money will disappear or be wasted on needless penalties or foregone discounts.
If you don’t have the skills available within your organization to set up the books, there are several alternatives. You can contact an accountant or enlist the help of an experienced friend or counselor to get the system started and show you how to maintain it. You can enroll in one of the many available courses in basic bookkeeping and do-it-yourself accounting. You can contract a bookkeeping service to update your records on a regular basis, or you can purchase one of the simplified commercially available bookkeeping systems.
The advice of a professional accountant will be extremely important in matters of taxation, financial planning, joint-venture negotiations, financing, expansion, and major capital asset acquisition. If you plan to incorporate your business, yearly financial statements will need to be audited by an accredited professional accountant.