Any business can run smoothly only if its financial transactions are properly recorded. Sales generated and the expenditure incurred in generating it; bookkeeping involves recording every detail relating to money. It is a very important part of small business accounting services. Almost all the accounting services provide this service as it is always in demand by companies. No matter what the size of the company is – small, mid, or large; it is required in all corporate houses. Small business bookkeeping services can perform this task in two ways:
*As single-entry bookkeeping
*As double-entry bookkeeping
Single-entry bookkeeping is not a systematic accounting practice and has many deficiencies. Companies prefer double-entry bookkeeping over it.
Double-entry bookkeeping has its traces as early as the twelfth century. It was used by Italians. Florentine bankers used this system as early as 1211 A.D. However, it came into full force after the Italian monk, Luca Paciolo, published a book on it. It was a book of mathematics with 36 chapters explaining double-entry bookkeeping. Though Benedetto Cotrugli invented this method, Paciolo has been credited with the tag of ‘Father of Accounting’! His book described the method in detail which enabled others to learn and use it. Small business accounting services include debit amounts on the left side and credit amounts on the right side. The account is settled if the amounts match or else there is a mistake.
Small business accounting services maintain the financial records of their clients in two parts:
*Credit
*Debit
Though this accounting system may seem easy to normal readers, it is a tough procedure. Expert accountants may also find it confusing at times. Money coming in is included in the debit column. Debits are included on the left hand side and credits are included on the right hand side. This process gets more complicated as large property, shares, huge amounts of cash, salaries, big investments, and other financial matters get involved. It becomes extremely important to maintain correct entries for investors and for company records. Availing small business bookkeeping services is advantageous in such a scenario.
Every coin has two sides to it. There are advantages and disadvantages to double entry bookkeeping. It is a very complicated process. It consumes a lot of time. Companies may find it hard to find suitable accountants to carry out this task. However, there are more positive aspects of it. Single entry bookkeeping services cannot be used everywhere. Double entry bookkeeping is a better option as compared to the former. It makes accounting clear and easy to understand for the onlookers. As for complication and difficult in obtaining an accountant is concerned, it can be resolved by approaching small business accounting services.
Small business bookkeeping services are increasingly making use of double entry bookkeeping. Transactions are maintained appropriately because of this system. It reduces the risk of errors in accounting. Its use is expected to grow in the coming years. It is ideal for tax records. Exact information about the assets and liabilities in a company can be obtained through this system. Small business accounting services offer this service to small-time enterprises who cannot manage it on their own!