Keeping Proper Business Records For Your Online Business
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Keeping Proper Business Records For Your Online Business
As you may be aware, keeping proper bookkeeping records is very important for
any business whether it is small business, home business or online business.
Below I shall discuss the importance of keeping proper business records and the
main reason for doing so. Asides from this, I shall also recommend a simple way
of keeping your records and how to select a reliable bookkeeping service
provider if you intend to outsource your bookkeeping.
Firstly, why keeping business records, you may ask. Well, the main reasons of
maintaining proper business records are as follow:-
1) Tax purpose
If you do not maintain a proper set of business records, it means you may not
be able to report your tax accurately and timely. This may cause you unnecessary
penalty by the tax authority. Furthermore, you do not want to pay extra tax
unnecessarily, don't you? The fine for late submission of your tax return could
be avoided if you start maintaining your books in a proper manner right from the
beginning of your business.
2) Financing Facility
The banks or financial institutions would want a set of your financial
statements before they could consider your application for financing facilities.
Usually the basic financial statements for home business consists of a statement
of income and expenditures and probably a summary of the business's cash flow
position. Without financial statements, the banks would have difficulty in
assessing the performance of your business and hence unable to extend you the
required financing facility.
So, now you know the importance of keeping proper records for your business,
but I don't know how do it? You may say. In fact it is not difficult to maintain
basic business records such as a simple cash book which include cash and bank
accounts of your business. Cash book forms the primary records of your financial
statements. You may consider using spreadsheet to record all the revenues and
expenses and come out with a trial balance at end of every month. There are a
lot of online bookkeeping tutorials and many of them are quite easy to
understand.
But bookkeeping may not be your cup of tea and you would want to consider
hiring somebody to do it for you. Fine, there are a lot of quality online
bookkeeping service providers out there, just go and look for one and the fee
could be quite reasonable. So how to choose a reliable bookkeeping service
provider? Firstly, ask for the qualification and experience of the service
provider. A competent bookkeeper should have at least 5 years of similar
experience in a bookkeeping practice and be a member of the bookkeepers
association. Besides, you should ask for their existing customers' testimonial
in order to judge whether their services are up to your mark.
In a nutshell, maintaining proper business records is as important as getting
business, so make sure you start taking action to maintain it right at the
beginning of your business.
About the Author
Poh Keiong owns
http://www.book-keeping-courses.com which contains review of some of the
free online book-keeping courses. Find out how to do book-keeping and learn how
to produce financial statements!
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Article Published/Sorted/Amended on Scopulus 2007-06-26 00:53:44 in Business Articles
