When it comes to bookkeeping, there are certain things to be taken care of to run the business efficiently. Firstly, it is essential to maintain an account of income and expenses regularly. You can use either accrual-based or cash-based accounting. In accrual-based accounting, you make note of the incomes when you get them and expenses when you pay them. In cash-based accounting, you make note of the incomes and expenses whenever they happen, not when you get or pay them. In case your business has an inventory, then it is better to go for the accrual-based accounting, and if not, cash-based accounting will do.
The financial status of businesses can be known only by regular maintenance of books. Everything that is paid and received must be updated regularly, in case of cash transactions. If the transactions are not purely based on cash, then the invoices raised or due should be maintained as they are mandatory records for any business. Issuing or cancellation of checks must be done with care and in both the cases, clear records must be maintained.
Thirdly, bank statements should be collected regularly from banks and should be compared with the in-house accounts. This will track all the expenses as well as incomes and help business owners know their exact financial position.
Nowadays, computerized bookkeeping software is readily available to suit all types of small, medium, and large businesses. It helps bookkeepers maintain all kinds of account statements and these details can also be backed up in case of computer troubles. Business people can maintain their accounts manually or electronically, depending on the size of their business and the volume of transactions.