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In its simplest terms the practice of basic bookkeeping for new business start ups can be divided into two main purposes. The first purpose will be to make calculations easier with regards to what profits have been gained and what losses suffered by a business in a particular period. This is achieved through carefully recording all income and expenditure. The second purpose is to enable a simple check to be made anytime that will indicate the current financial state. This is achieved through retaining entries with regards to assets held and liabilities owing.
Again, in recording the above information there are two basic types of method that can be used. These are basically either single entry book-keeping or double-entry book-keeping. The difference between these two methods should be fairly self-evident through their respective titles. However, to spell it out double-entry book-keeping involves literally repeating every entry recording so there are two identical entries, while, of course in single-entry book-keeping the entry is made only once.
The size and scale of the business will be a factor in deciding which of the above systems are used. Basically very small businesses often opt for the single-entry system, although most actually opt for the double entry system due to its greater ability to make locating mistakes so much easier.
To go into every detail involved in keeping the books is out of the scope of this article, so below follow some of the most essential points. To begin, each and every entry will be recorded in a so-called 'ledger'. More specifically, each transaction will be recorded here in both simple cash accounts and accounts that note the finer details of the transaction.
Further aspects of the practice include a so-called 'balance sheet' which is essentially a kind of statement comprising information on every asset and liability held. Specifically, assets will be entered on the right side with liabilities entered on the opposite side.
Naturally, there is much more to be learnt if one is considering doing the basic bookkeeping for new business start ups. At the beginning one will do well to consult a professional, however the trade can be learned through taking one of the many available training programs available, many of which can be found online.
Again, in recording the above information there are two basic types of method that can be used. These are basically either single entry book-keeping or double-entry book-keeping. The difference between these two methods should be fairly self-evident through their respective titles. However, to spell it out double-entry book-keeping involves literally repeating every entry recording so there are two identical entries, while, of course in single-entry book-keeping the entry is made only once.
The size and scale of the business will be a factor in deciding which of the above systems are used. Basically very small businesses often opt for the single-entry system, although most actually opt for the double entry system due to its greater ability to make locating mistakes so much easier.
To go into every detail involved in keeping the books is out of the scope of this article, so below follow some of the most essential points. To begin, each and every entry will be recorded in a so-called 'ledger'. More specifically, each transaction will be recorded here in both simple cash accounts and accounts that note the finer details of the transaction.
Further aspects of the practice include a so-called 'balance sheet' which is essentially a kind of statement comprising information on every asset and liability held. Specifically, assets will be entered on the right side with liabilities entered on the opposite side.
Naturally, there is much more to be learnt if one is considering doing the basic bookkeeping for new business start ups. At the beginning one will do well to consult a professional, however the trade can be learned through taking one of the many available training programs available, many of which can be found online.
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