Purpose and Requirements for Keeping Financial Records
Purpose and requirements for keeping financial records
Keeping accurate and properly managed records will contribute the success of business in following ways:
• Highlights the financial problems and enable remedies to be put in place
• Provides valuable information for the future sale of your business where that is required
• Helps to mange things shortly and saves your time
• Fulfils the obligations as to taxation law
• Provides information of management and helps to take further decisions based on
• Increase the chances of success
• Provides information to enables the control of cash in business
Good records helps you to do the work quicker and enables you to monitor every situation easily.It can helps you to check that if a particular product has been selling as loss or that your sales are 50 % less than your recorded budget or you have earned £10,000.00 more than expected budget.
Records must be kept to show an idea of something on which business is concerned such as:
• Detect net profit and gross profit
• Judge that business is running successfully
• Compare financial situation with last year budget and with current budget
• How much you owe for rent or business expenses
• To have an idea about the products that are making profit and that are running at lost
• How often you turnover your stock
Finacial recording can be done in following ways :
• Double entry bookkeeping
• Manual or computerised systems
• The trial balance
• Day books and ledgers
Record keeping system should be accurate, easy to follow and be very simple.Good record keeping is vital in regards to meeting the financial commitments of the business and providing information on which decisions for the future of business can be based.
Techniques for recording financial information
Bookkeeping:
The starting point for collecting financial information is to systematically collect records of financial transactions e.g. invoices, receipts etc and to enter these into some
Keeping accurate and properly managed records will contribute the success of business in following ways:
• Highlights the financial problems and enable remedies to be put in place
• Provides valuable information for the future sale of your business where that is required
• Helps to mange things shortly and saves your time
• Fulfils the obligations as to taxation law
• Provides information of management and helps to take further decisions based on
• Increase the chances of success
• Provides information to enables the control of cash in business
Good records helps you to do the work quicker and enables you to monitor every situation easily.It can helps you to check that if a particular product has been selling as loss or that your sales are 50 % less than your recorded budget or you have earned £10,000.00 more than expected budget.
Records must be kept to show an idea of something on which business is concerned such as:
• Detect net profit and gross profit
• Judge that business is running successfully
• Compare financial situation with last year budget and with current budget
• How much you owe for rent or business expenses
• To have an idea about the products that are making profit and that are running at lost
• How often you turnover your stock
Finacial recording can be done in following ways :
• Double entry bookkeeping
• Manual or computerised systems
• The trial balance
• Day books and ledgers
Record keeping system should be accurate, easy to follow and be very simple.Good record keeping is vital in regards to meeting the financial commitments of the business and providing information on which decisions for the future of business can be based.
Techniques for recording financial information
Bookkeeping:
The starting point for collecting financial information is to systematically collect records of financial transactions e.g. invoices, receipts etc and to enter these into some