Intro to Bookkeeping for Your Business

In the day to day running of any commercial enterprise …

 

In the day to day running of any commercial enterprise there will inevitably be a large number of financial transactions of various types happening on a daily basis. The importance of these transactions which will of course vary depending on the organization in question. Keeping track of all these transactions is important, particularly around tax season when every organization is expected to pay money into the government just the same as private citizens. Unlike private citizens though, businesses and non-profits typically bring in and spend money far more often.  As a result it becomes necessary to properly track the income and expenses of these groups closer, and file them away in a manner that’s easy to reference at a later date.

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Bookkeeper vs. Accountant

The process of recording the transactions of an organization, particularly an organization that takes in and sends out a large number of transactions on a frequent basis, is known as bookkeeping. While recording these transactions is a part of the accounting process for a business or non-profit organization, a bookkeeper is not necessarily the same as an accountant. While a bookkeeper can record this information, an accountant is required to properly prepare and organize the information for purposes ranging from applying for grants and subsidies to preparing statements for investors to, of course, preparing an organization’s income records for the ever dreadful yet absolutely necessary to society purpose of taxes.

Any process that involves recording financial transactions is a bookkeeping process, however, and most accountants can reasonably be expected to work as bookkeepers as well as accountants if it so comes to that. Still, a reasonably trained employee can also serve as a bookkeeper without full training as an actual accountant. A bookkeeper’s job is to record the daily financial transactions of a business, as well as collecting other records of the transactions afterwards, ranging from receipts to invoices to digital records showing the fuller depths of a business’s operating income and expenses. It is also the responsibility of a reasonably trained bookkeeper to ensure that all transactions are recorded in the proper place to ensure that each transaction is recorded in the right place.

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Daybook Defined

There are a number of places where these records are kept. On a daily level, these records are known as daybooks. There is the sales daybook, which is where a book keeper records sales invoices, usually on the spot sales made by an organization. The sales credit daybook is for sales made on credit, a book that is growing ever more important in an era of credit cards and other payment methods. On the other hand, the purchases daybook is where the bookkeeper records all the purchase invoices, where by the business records the expenses other businesses charge them for daily operations. The purchases debit daybook is where all the purchase debit notes are recorded, a complicated matter that all book keepers should be ready to handle. There is also the cash daybook, wherein all the money in the form of cash or similarly liquid assets are received and spent by a business, which may be split into two separate books, one for cash spent and one for cash received.

Of course, the records kept by a bookkeeper are basically just records, usually made on the spot and then recorded into the daybooks at the end of the business day or even an employee’s shift at the workplace. These records are considered the “trial balance stage” of an organization’s transaction records, usually spanning no more than a day or at most a week at a time. The trial balance stage is the first stage of the accounting process, where very little worthwhile information can be found easily, instead requiring a closer look to get a broader picture of the organization’s financial situation.

Income Statements and Balance Sheets

From there, the full depths of the assets transferred tends to call for a business owner or their accountant to actually prepare sound, financially coherent reports about the actual depths of the financial situation of an organization, whatever that situation may be.

From the trial balance stage, an accountant then takes the bookkeeper’s records and transforms them into income statements and balance sheets, both invaluable tools for keeping the full picture of a business visible to its owners and others.

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Business Coaching from the Pros

A Business Coach is There to Help You Succeed in Business

 

A business coach works with you, on a one-on-one basis, to help you improve your business and stick to your goals. Business coaching may help you set specific goals and hold you accountable to your business plan. A great business coach can dramatically increase your business. They are great at helping you stick to your implementation plan. Don’t mistake the time you put into a business as time invested in your business. You should be constantly learning about your industry, and a business coach may be a great way to help you apply your knowledge in the form of marketing campaigns.

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Consider Cost

 

It is important you understand that a good business coach will not cost you anything in the long run: It will cost you at first, but in the long run, it is going to pay back many times over.  If you knew you could pay a business coach $2,000 a month for them to increase your revenue by $12,000 a month, would you do it?  Your mentality should not be “how much is this going to cost me?” but “how much we can make together?

Do I Need a Business Coach?

 

You need to do some soul searching when deciding if you should use a business coach. Ask yourself questions like “Did you make the profit you expected?” and “Is your business growth on track?” If the answer is no you may want to consider a business coach.

Choosing a Business Coach

 

It can prove difficult finding the right business coach. You should make sure to ask the right questions to ensure you get someone who fits your needs. Ask them to tell you about their business coaching team. It is better to work with a firm that has multiple coaches who specialize in very specific skills. You should ask them “what achievements are we going to achieve?” and can they guarantee results? If they don’t produce results, they shouldn’t get paid. It is important to understand that you don’t purchase a business coach’s time, you are paying based on returns they provide.

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