Book keeping in the business--after Debits and Credits

Book keeping provides a reliable source to measure the performance of the company. Companies need to choose between the two methods of accounting which they have to follow. These are Cash basis or Accrual basis of accounting. The difference between these two is the timing when the company actually records the sale or the purchases made to identify the money inflow or outflow. Some companies follow Hybrid system of accounting by which they manage to follow few accounts on cash basis and few on accrual.  

Post debits and credits, role of the Accountant is to ensure compliance of the  following.

1. To gather statements and documents.

2. Check work and confirm results.

3. Review data for errors and questions.

4. Reconcile bank accounts, credit cards and other assets and liabilities accounts.

5.  Print month end reports and close the books.

6. Draw financial statements and compliance reviews.

7.  Present, explain and substantiate reported results.

While reporting, it must be kept in knowledge that Income and Expenditure represents health of the organisation and Balance Sheet, wealth of the organisation. Figures be carefully inserted in the relevant statement.  

Further, in order to keep the business in tone, following steps are needed to introduce -

1. Avoid unnecessary paperwork.

2 Raise invoices on time.

3. Issue digital receipts.

4. Ensure payments received on time.

5. Automate tax returns filing system. Much of this system can be automated if details are kept on 

    tax software.

6. Use internet systems to bank statements with automated software for bank reconciliations.

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