Proper bookkeeping such as bookkeeping Manchester for example can help you make decisions that will affect the future of your business. The more organized your folders are, the more useful they will be to you.
Well-organized bookkeeping can help you:
- keep track of your current and past financial situation, and allow you to make comparisons;
- plan your eventual financial situation and make forecasts;
- obtain information that will allow you to make informed business decisions;
- meet the reporting requirements, namely those of the Canada Revenue Agency and Revenue Quebec;
- Save time and energy if your business is audited.
Types Of Records To Keep
People who run a business or engage in business activities must keep records of various business transactions. These files include:
- paper or electronic receipts;
- the expense journal and the sales journal;
- payroll records;
- records of taxes collected and paid.
Keep For How Long?
As a general rule, you must keep all records and supporting documents that help determine your tax obligations and the credits to which you are entitled to six years from the end of the last taxation year to which you are entitled. They relate. At the very least, financial records should provide a permanent, accurate, complete account of your daily expenses and income.
What Is The Purpose Of Accounting And Bookkeeping?
Primarily, accounting aims to provide financial information for governments, suppliers, banks, investors, employees, and unions. Each main group of users of this information will be able, from it, to assess the economic and financial situation of the company and make inferences about its future trends.
After All, What Does The Purpose Of Accounting Involve?
This is information involving accounts payable and receivable, assets, etc.; from them, it is possible to generate financial statements, such as Balance Sheet, Statement of Income for the Year, Statement of Accumulated Profits or Losses, and Statement of Origins and Application of Resources.
As well as data that are not indicated in the financial statements, such as interest rates and fixed asset depreciation rates, which end up being shown in the Explanatory Notes, which are part of accounting for companies.