Bookkeeping is the recording and classifying of all financial transactions within your small business. It keeps track of what your business is spending and receiving. Keeping an accurate set of books allows you to check that you’re bringing in more money than what is going out, gives you reliable financial information for planning and budget decisions, keep track of your cashflow, find incorrect payments that might cost you money, get your tax return completed accurately and having financial information available to work with other parties such as lenders, investors and Accountants services.
This is a system of bookkeeping services where there is a double entry for every transaction. Each entry requires a corresponding and opposite entry to a different account. It increases accountability and allows for easy preparation of financial statements. Most accounting software services use this method and most businesses use this method.
With single entry bookkeeping each transaction is recorded as a single entry as the name suggests. It is simpler than double entry bookkeeping and may be sufficient for very small businesses in order to record your income and expenses. If you are the kind of business that manages to operate with a sheet of paper and a shoe box then single entry bookkeeping could be sufficient for you, however it is never too small of a business to transition into the use of modern bookkeeping tools.
More and more businesses are moving their bookkeeping from desktop programs to online. There are many benefits to doing this such as having mobile access at any time (all you need is an internet connection), it allows for real-time books and one source of truth as there is only one master file, you and your Bookkeeper can collaborate over the phone as you both see the same information at the same time, it’s a cost and time-effective solution, it is one of the most secure ways to store information, there are no back-ups to perform, paperwork can be reduced to zero and it allows for better control of your financial processes. Apps can also be added to enhance the efficiency of your business' bookkeeping, catering to your specific needs.