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The entrepreneurs like you take risk to generate profit and wealth. The profit of any business is reflected in books of accounts and needs to be found out in receivables,, inventory, taxation and other current and fixed assets.

Without accounting, you’re driving blind like a car without a gas gauge. Sure, the car is driving fine, but

Who knows how long before you have to pull over and wait for a friend to bring a Jerry can?

In this guide, you will get an easy step by step process for accounting.

  1. Begin with End in Mind – Decide list of reports to track:

Bookkeeping done without keeping reports in mind is useless. Types of reports required to be tracked are different for each business. There are financial statements, inventory reports, AR and AP aging and analysis reports, Cash flow statement, project tracking reports and so on.

For getting free list of reports and getting free advice on which reports you need to track for your business, email on chintan.dixit@blackboxconsultancy.ca or call now on 519.716.4456

  1. Prepare list of source documents required for accounting:

Depending upon nature and size f business and organizational structure, more or less documents are required for comprehensive accounting system. Source documents range from sales invoices, purchase bills, bank statements, packing list, sales order, purchase order, estimates, and budgets and so on.

  1. Choose accounting system:

You can choose manual accounting, simple spreadsheet, complex spread sheets, desktop accounting software or cloud accounting software. Quick Books and Xero are popular and user friendly software.

  1. Document Management System:

A small team with less number of transactions can choose manual filing system. Assigning UIN (Unique Identification Number) to each document is a good policy to ensure integrity of the system. There are advanced digital document management systems, which enhance workflows and help in easily retrieving documents when needed.

  1. Choose accounting method – Cash or accrual:

Though small businesses can choose cash method of accounting, for medium sized businesses accrual method of accounting is really useful.

  1. Categories your transactions:

Every transaction you make needs to be categorized when it’s entered in your books. This helps your bookkeeper catch more deductions, and will make your life easier if you get audited. Six months later, an unmarked receipt for lunch at a restaurant might not mean much to you. Was it a client lunch? Did you treat your employees after a successful quarter?

  1. Make it a habit:

Remember, accounting, bookkeeping, record keeping and report tracking is not a standalone one time activity. It is a continuous process. If you fall behind, it will become ineffective and less helpful.

 

If you fall behind accounting and bookkeeping and your reports do not contribute in growth of your business, take support of Black Box Consultancy Services Inc. For free advice or regular professional support, email on chintan.dixit@blackboxconsultancy.ca or call now on 519.716.4456