Basic bookkeeping and accounting guide

Bookkeeping is the core of any business, be it large or small. In a business, you have to deal with money and lots of it. Not having the appropriate to manage them can be troubling in the long run.

For instance, when you’re filing for income tax, you will need to present all your expenses over the year. The same thing applies when you’re getting audited. Maintaining the paperwork is as important as running your business.

Of course, it isn’t easy to do all this by yourself. Small to medium size businesses owners think it’s easy to maintain a record. However, as the business grows and work starts piling up, it becomes almost impossible to handle all that workload. Hiring an accountant should be a top priority in such situations and the accountants in Oakville are just perfect for the job.

When hiring an accountant, make sure they are a perfectionist and a stickler for completeness. They should be adept at both accounting and bookkeeping (often confused to be the same).

Basic Bookkeeping

Bookkeeping means keeping a daily record of your company’s financial transactions. Bank transactions, expenses, sales all go down on the record. What you need to realize is that this ledger is the pivot of your company’s finances.The complexity of bookkeeping depends on the size of your business and daily transactions.

There are two bookkeeping methods, single-entry and double-entry. Usually, businesses opt for the double-entry system, where every transaction requires two entries in two different accounts, one being the debit (Cash) account and the other the credit (Revenue) account.

Nowadays, most bookkeeping is handled by computer software. This is just the basics and will give an idea regarding the whole process.

Basic Accounting

Accounting, also known as the language of business, is a process by which you can measure, process and communicate financial information across your company. Accounting helps you gather information on your resources, how they are being handled and financed and finally the results they yield through use.

The accountants in Oakville is like a supervisor who overseesthe functioning of your company and helps you manage the cash flow.

They do so by:

  • Creating a record of all financial transactions of your company
  • Interpreting the data collected by the booker and determining how it will affect your business in the days to come
  • Presenting the present financial structure of the company and ways it can be improved and optimized
  • Preparing tax returns and helping out during audits