| It is mandatory for a firm or organisation conducting | | | | records and debt records have to be kept in the best |
| business to keep accurate bookkeeping records that | | | | possible order at the end of a financial year for |
| needs to be produced at the end of a financial year. | | | | purposes of taxation. Failure to keep an accurate |
| The set of accounts should show the sales income, | | | | record of financial transactions often results in |
| incurred expenses and profits for tax purposes. These | | | | administrative burdens of all sorts. For instance, if |
| businesses employ the services of accounts clerks | | | | taxation deadlines are not honoured, it may lead to |
| and expert bookkeepers in order to maintain financial | | | | hefty penalties. |
| records and to generate accounting information and | | | | In the case of a small business owner opting not to |
| reports on a regular basis. Small business firms and | | | | stick to the use of bookkeeping software or not to |
| self employed people have to make a choice related | | | | outsource the financial function to some bookkeeping |
| to the way financial accounts are maintained and | | | | companies or experienced bookkeepers, an |
| re-produced. A small firm might employ the expert | | | | accurately maintained manual financial recording |
| services of bookkeepers to look after the accounts | | | | system is a must. |
| while some other firms may opt for manual recording | | | | Generating an income and expenditure report for a |
| of financial transactions. Still some others make good | | | | business using the various financial documents is not |
| use of a customised bookkeeping software system. | | | | that simple and most of the independent bookkeepers |
| Advantages and disadvantages abound while making | | | | are capable of managing this part because they have |
| all these kinds of methods and techniques work for | | | | acquired the skills required to keep such bookkeeping |
| you. It is wise to make a definite decision about the | | | | records. If a company chooses to stick to a manual |
| system that has to be adopted to take care of the | | | | bookkeeping system, a well-disciplined recording of all |
| bookkeeping part of the business, at the very outset | | | | the financial transactions, that too, on a regular basis |
| itself. Financial control over the different business | | | | must be strictly enforced. This must be carried out as |
| activities a firm undertakes to accomplish and a very | | | | an essential function; and not as an administrative |
| clear knowledge of how the business is performing at | | | | burden to the company. With the help of good |
| a particular point in time is crucial to success in any kind | | | | accounting system, one gets to see and understand |
| of business environment. | | | | the financial position of a firm or business organisation |
| The problem with a business not taking a decisive | | | | at any given time. It will also aid one in taking positive |
| decision on its financial accounting principles and | | | | actions as and when required in order to achieve a |
| procedures assumes prime significance as the sales | | | | satisfactory and convincing financial result. |
| invoices, purchase invoices, bank statements and | | | | |