Bookkeeping is the process of recording and classifying your business financial transactions. Bookkeeping is for all businesses, small and big and helps business owners know where revenue is coming from, where the money is being spent and when taxes are payable. This is the foundation of Accounting and helps a business owner realize if a business is profitable or not.
Even though bookkeeping may seem complicated and time demanding for the business owner, here is why it is important to keep proper books of account:
Should a business owner wish to do their own bookkeeping here are a few guiding steps;
Step 1: Separate personal and business financial transactions
Step 2: Adopt double-entry accounting – Track where your money comes from and where it goes
Step 3: Adopt the Accrual Basis of Accounting – Recognize revenue and expenses when they are incurred
Step 4: Choose a bookkeeping system – Manual or Accounting Software
Step 5: Categorize your transactions – Helps analyze revenues and expenses
Step 5: Organize and keep documents – Useful for supporting your expenses especially during Audit
Step 6: Be consistent - We recommend that business owners set aside time, at least once a month to record all the business transactions.
At Tsavo Management Consultants Limited, we are a dedicated team of professional accountants providing Bookkeeping, Accounting, Payroll, Tax, and Business Advisory Services to SMEs in the country. We also build capacity among Business Owners and Leaders through our diverse training programs.
If you are interested in outsourcing your bookkeeping and accounting roles or need training to manage your books properly, get in touch with us on 0700 053980 or email firstname.lastname@example.org.