Despite the importance of bookkeeping, small businesses often neglect it because of the time and effort it takes to set up and tend to a bookkeeping system. Most business owners would rather be out generating new sales than sitting in the office recording transactions.
But to be successful in business today, you can't afford to ignore bookkeeping. To understand why, it helps to comprehend what bookkeeping is and how it affects your business.
Bookkeeping is the systematic recording of a business's financial transactions. It's the first step of the accounting process, which also includes classifying, reporting and analyzing financial data.
Bookkeepers chronologically record all financical transactions — cash disbursements, cash receipts, sales and purchases, and others — in a journal and post the journal entries to a general ledger of accounts, which accountants use to prepare monthly financial statements. They aslo maintain ledgers containing customer and vendor balances so that you know who owes you and who you owe.
Although bookkeeping doesn't contribute directly to your profits, there are several good reasons to maintain balanced books:
Bookkeeping generates the information you need to manage your company. For example, up-to-date general ledger information shows which customers are past due on their accounts or have outstanding balances on lines of credit. Financial reports help you assess whether or not gross profits and expenses are in line with your budget and projected net profits. In other words, these reports help you anticipate and avoid cash-flow problems.
Lenders and investors want to see accurate and complete books for a business before granting loans or raising capital for it. If you rely on outside financing, this is the most important reason to invest time and money in bookkeeping.
In order to know how much you owe the IRS, you need an accurate picture of your company's income. In addition, keeping receipts and canceled checks will back up whatever deductions and tax credits your company takes. Without good record keeping, you leave yourself exposed to fines and penalties if you get audited.
Bookkeeping Options
Larger businesses (usually more than 20 employees) hire an accountant or a bookkeeper to maintain their books. Businesses with fewer than 20 emloyees, hire a bookkeeping service or learn to do it themselves.
If you prefer to do it yourself, one of the first decisions to make is whether to use a manual or computerized bookkeeping system. Most companies use desktop accounting software, such as Intuit's QuickBooks or Peachtree Software's Peachtree Accounting. These programs automate the acconting process.
Online accounting solutions are another option. Internet-based accounting solutions allow multiple users to access company records from any computer with an Internet connection. When you use an online application, you contract with another company to keep your financial data on its secure servers. You access your records online by entering a password, and the service provider is responsible for providing the software, security and data storage.
If you have a Web store, consider a Web-based bookkeeping solution that will help you combine online and offline transaction reporting. Many online bookkeeping applications allow e-commerce transactions to flow seamlessly into online general ledgers, saving you from downloading them or rekeying transactions into a desktop system.
PB - Professional Bookkeeper Program (Course Modules 1-3)
The Professional Bookkeeper (PB) Program is the premier training course in small-business accounting. For more than 25 years, Universal Accounting Center has specialized in small-business accounting, honing our training materials to become the most complete and competitive More...
Master the tools, procedures, and underlying principles that make up the bookkeeping processes of all businesses. Understand the core building blocks of Accounting and Bookkeeping. -- 4 DVDs & Manual. See Sample
Apply your understanding of the core accounting principles to specific industries. You will learn to set up books from scratch, do payroll like a seasoned pro, and much more. -- 4 DVDs & Manual.See Sample
Sure ways to set up complete bookkeeping systems and manage the books for a variety of more sophisticated industries. -- 4 DVDs & Manual.See Sample
$495
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Three Months Additional Follow-up Support (Free Promotional Offer)
for a total of 6 months follow-up support
$297
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Two Additional Practice Sets (Free Promotional Offer)
Practice makes perfect. The modules already contain practice sets for nine different businesses. With your purchase you'll receive two more practice sets, giving you eleven in all. This will give you even more confidence and experience in various industries and the opportunity to work with additional types of clients.
If, after completing the course, you feel the course didn't live up to your expectation, simply return the materials to Universal, for a 100% refund of any monies paid.
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PB - Professional Bookkeeper Program (Course Modules 1-3) 
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