Topics: Generally Accepted Accounting Principles, Income statement, Balance sheet Pages: 2 (331 words) Published: February 5, 2013
Record Keeping Systems
Creating a system for collecting revenue, paying employees, suppliers, and taxes correctly and on time is part of operating a small business. You may choose to operate a manual or electronic financial record keeping system, but regardless of its format, it should be simple, easy to understand, reliable, accurate, and provide information when you need it and in an accessible format. -------------------------------------------------

Manual record keeping systems
Manual record keeping systems consist of paper based journals for each financial year. They are a good way to learn about bookkeeping and accounting, and keep control of your financial records when you are starting out. The journals are divided into separate sections for receipts, payments, wages and superannuation, bank reconciliation, inventory and others. You record your business transactions manually in the appropriate sections for each month. Manual record keeping systems are based on cash accounting principles where you record revenue and expense transactions when they occur.

Electronic record keeping systems
Electronic record keeping systems:
* are an efficient way for keeping your financial records; * generally provide complete accounting functionality; and * provide the option of using accrual accounting principles where you record revenue and expenses when they are incurred. * Using computer accounting programs, you can easily generate orders, invoices, aged debtor reports, financial statements, employee pay records, and inventory reports. Many programs have a direct email facility for sending invoices to clients, orders to suppliers, or BAS returns to the Australian Taxation Office (ATO). Some allow you to monitor actual business performance with financial forecasts. * There are various commercial computer accounting programs available from commercial software retailers. Before purchasing a system, it...
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