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Running a business and ignoring or having inadequate accounting software is like building a house on top of a bonfire and not bothering to fit a fire alarm. Many small businesses run into difficulties sooner or later, it is a fact of business life. Timing and how those crises are dealt with are critical to both the success and in some cases survival of the business. Big business uses the financial function and accounting software to analyse and improve financial performance through financial control and the exploitation of opportunities. Small business has a serious problem of viewing accounting software as an administrative headache for annual tax purposes missing the valuable opportunities the financial system can provide. Many types of accounting software exist to record the financial transactions of business and provide the management with financial control to achieve the profit and loss performance required. The correct choice is highly dependent upon the size of the business and the degree of sophistication and financial control required. Accurate financial records must be kept by every business and bookkeeping software spreadsheets can satisfy this requirement. Further by adopting a simple accounting system the small business can use the bookkeeping spreadsheets to both manage financial control over the business and complete the essential task of reporting for tax purposes. All small businesses have to choose between keeping manual records of financial transactions and the benefits, advantages and disadvantages of utilising bookkeeping software and or employing bookkeeping services for this purpose. The correct choice will vary from business to business but a choice should be made to achieve the best financial performance. Single entry bookkeeping is an accounting practise that can be employed by small business and in particular self employed business where a balance sheet is not required for financial control or tax purposes. A self employed bookkeeping system is basically the production of an income and expenditure account to produce a net taxable profit for tax purposes. 1 | ||
