| All limited companies are required by law to generate | | | | optional requirement for self employed business |
| a statement of assets and liabilities. In addition to that | | | | persons. |
| they have to maintain a system of financial control that | | | | In the absence of a very good double entry |
| invariably adopts a system of double entry | | | | bookkeeping system, a company doing business has |
| bookkeeping with the help of some accounting | | | | less control over the different aspects of debits and |
| software. And, outsourcing the bookkeeping task is | | | | credits related to the business. These being the |
| found to be the perfect solution to everything. High | | | | amounts owed from customers who are usually called |
| speed access to all business accounts and accurate | | | | debtors and the money owed by small scale |
| bookkeeping system at low costs ensure that you run | | | | businesses to suppliers who have delivered the goods |
| your business firm without any hassles. | | | | and services on credit; and they are termed creditors. |
| Every small scale business firm is required to keep | | | | Commercially available single entry bookkeeping soft |
| bookkeeping records to be produced at the end of the | | | | wares are not just some accounting packages that |
| respective financial year- a set of accounts that | | | | generate profit and loss accounts, but are tools that |
| shows the sales, income, business expenses and the | | | | carry additional facilities that aid in the financial |
| gross and net profit in addition to tax statements. Most | | | | management & control of a business. They do this by |
| of the medium and large scale businesses employ the | | | | providing optional fields for cash, bank, debtors & |
| services of accounts clerks and qualified bookkeepers | | | | creditor accounts that need to be maintained as |
| to maintain their financial records in a good format and | | | | stipulated by the authority. |
| to produce regular and vital accounting information. | | | | Poor quality of financial management of small |
| Double entry bookkeeping is defined as the accounting | | | | businesses is a major problem as this can drive a |
| technique used to record the financial transactions | | | | small business firm to fall into the liquidation and |
| occurring in a business where each and every | | | | bankruptcy trap. Every business must have, at any |
| transaction is entered or indicated twice, resulting in | | | | given point in time, sufficient cash flow or availability of |
| equal and opposite transactions. Double entry is a must | | | | resources to engage in trade the next day. Good bank |
| for all kinds of businesses that are required to produce | | | | records and maintenance of a positive cash flow |
| a profit as well as a loss account apart from a | | | | assumes importance; this is due to the fact that |
| balance sheet. The same rules may not apply to self | | | | without liquidity no business firm can engage in |
| employed persons and businesses that do not need to | | | | commercial trading activities. The preparation of |
| produce statements of profit and loss accounts and | | | | financial accounts using single entry bookkeeping takes |
| assets and liabilities statements. It is interesting to find | | | | into consideration the recording of prime financial |
| that in the UK, a balance sheet happens to be an | | | | transactions only once in contrast to the other system. |