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How to Create an Efficient Bookkeeping System

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If you own a small or medium size business, you must know that an efficient bookkeeping system is an essential tool, especially if you wish your records to be accurate. Without an efficient system, you will find it difficult to control your expenses and pay your corresponding taxes accurately and on time.

Why is it important to use an efficient bookkeeping system? Basically because everybody has access to accurate information about the business’ functioning: the owner, the bookkeeper, and all the other parties involved.

Efficient bookkeeping system

An efficient bookkeeping system implies adequate bookkeeping software. Apart from that, the owner must have the necessary basic accounting knowledge that will allow him/her to keep all the records properly organised, create back-ups for all the files on a regular basis, and keep track of all the important bookkeeping data. Though it may sound like a complicated task, requiring the assistance of a professional, self-maintaining a bookkeeping system is not that complicated.

The first step requires the acquisition of the adequate software. Given the wide variety available on the market, a little research might be needed before opting for the ideal software. The next step is learning how to use that program. Well, there are several ways you can achieve that: self-education (i.e. you try, fail, and try again), reading the instructions book, or ask for professional help.

Once you get a grasp of your newly purchased software, you can embark on the next adventure: enter the data into the software. It is highly important to keep all your statements, receipts, invoices etc. Otherwise, you will start assuming numbers. And that can only lead to inaccurate results.

Having basic accounting knowledge is not mandatory. But knowing the difference between revenues, liabilities, assets, expenses, and equity can help a lot when it comes to reading your business’ financial statements. If you lack this basic knowledge, you should seriously consider taking an introductory accounting course. This way, you will be able to analyse the results of your business’ financial statements and look for a way to improve them.

Now that you have the software and the necessary accounting knowledge to handle it efficiently, there is another aspect you should not overlook: back-up your files. If your hardware fails on you, you won’t have to undergo the chore of re-creating them. Using more than one single storage device is also recommended in order to avoid losses by damages.

Once you complete all these steps, make sure you regularly update your business’ data. Catching up with pending transactions is not a very funny activity. All the transactions that involve money should be recorded as soon as possible. Printing monthly reports may also help you get an accurate idea of how your business is developing.

Though at first sight it may sound overwhelming, self-maintaining an efficient bookkeeping system is an attainable goal. All it needs is some time and a little bit of dedication.

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