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Value Your Hard-Earned Money

The biggest misconceptions about household budgeting are spending less, compromising on your superfluity lifestyle, and financial restrictions on everything, which means no family hangouts, no shopping, and no vacations. Budgeting may be associated with a frugal lifestyle but it doesn’t have to be in reality. Budgeting doesn’t have to make you spend less but it surely allows you to spend smart, as it prevents you from overspending on less important items. Staying on top of your hard-earned money is essential for ideal budgeting because, without knowing your monthly expense limit, you cannot expect to have success. Similarly, you cannot expect to make better financial decisions and projections if you do not have a clear picture of your cash flow or finances.

Allocating Your Paycheck(s) Wisely

Although people may have different perspectives about household budgeting, no one can deny the fact that households can save a lot of money for hard times if they budget their monthly paycheck(s) properly. Households must set their priorities and budget their resources effectively in order to have a financially secure and stable future. Creating a household budget to limit certain extraneous expenses and knowing the actual status of your finances requires a lot of commitment, patience, planning, and wisdom. In fact, it is your motivation and determination that encourages you to save for your family to meet financial uncertainties and emergencies.

Budgeting Helps in Maintaining a Healthy Lifestyle

Cutting monthly expenses is certainly an intimidating task for most households, especially for those who have just tied the knot. You and your significant other ideally need to make a household budgeting plan right from the beginning in order to have a financially secure and healthy lifestyle. The need to manage your paycheck(s) has become more intense than previous times which means an ideal management of resources is nearly impossible without making a proper budgeting plan.

Household Budgeting Options

Households that cannot budget their paycheck(s) properly have two options to consider. 1) Hire a budgeting partner 2) Employ household budgeting software. Those who find it challenging and costly to hire a personal budgeting mentor can utilize advanced budgeting software to budget their monthly paycheck(s). All that you need to do is search and utilize the software that has the capacity to deliver you the best results and budgeting plan according to your needs.

Managing Accounts with Accounting Software

Have you ever wondered why so many start-ups fail to manage their internal and external finances? The reason is obvious. They most likely lack the accounting knowledge, skills, and abilities to manage their finances and reduce costs that can be avoided. Plus, they also fail to maintain an order in their cash flow (influx or outflow of cash). Sketching a clear picture of your financial standing may be hard but not impossible. Businesses also have two options to know the current financial position of their company. Either to 1) Hire an accounting professional or 2) Use accounting software.

Accounting Software Or Household Budgeting Software—Is There A Difference?

Yes, accounting and household budgeting software are completely different from each other but both serve the right need of their own respective domains! Accounting software helps business owners to reduce costly errors, minimize tax bills, repayments of debt(s) and, hence, help businesses of every scale to know the exact status of their finances for making financial projections. On the other hand, household budgeting software helps families to manage their monthly paycheck(s) and allocate their hard-earned income wisely.

Accounting and Budgeting—Done Right!

The best part is now you have access to the finest accounting/bookkeeping agencies that will not only help you to manage your accounts but also help you with household budgeting. There are also some companies that offer a discounted bundle of services or packages which can be cost-effective and reliable.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Group of multi ethnic executives discussing during a meeting. Business man and woman sitting around table at office and smiling.

What Is Bookkeeping?

Bookkeeping is a subset of accounting in which financial transactions are recorded, analyzed, transmitted, and reviewed to make important business and financial decisions for a stipulated period of time. The transactions includes sales of goods, purchases of business machinery and equipment, vendor invoices, receipts, and payments by an individual or company.

The person who records, handles and performs day-to-day bookkeeping activities is generally known as a bookkeeper. All of the cash and credit transactions are recorded and ensured by a bookkeeper who is also responsible for keeping all business transactions in order.

Bookkeeping for Start-Ups

Most medium to large scale businesses have employees who manage the accounts payable and receivables, payroll, vendor invoices, bills, and other similar day-to-day transactions. They are often supervised by higher authorities or accounting professionals that can predict the fate of the company by making financial assumptions and projections.

Bookkeeping is one of the most critical aspects of every business. For start-ups, the need for a professional bookkeeper to run and manage the day-to-day operations becomes even more crucial. Start-ups, from the very beginning, need to record all business transactions in order to give their accountants an opportunity to sketch a clear picture of the business’s finances.

Why Do Most Start-Ups Fail?

Entrepreneurs who fail to administer their financial records, cash flow, and other important areas of their business create trouble that is hard to resolve. Start-ups that fail to task their employees with work, at the later stages, regret when they are out of the competitive race. Since making financial projections and assumptions is entirely dependent on how well you extract financial data out of your bookkeeping records, you need to hire competent employees who will take responsibility for maintaining and managing the business books, otherwise known as bookkeeping.

Bookkeeping for Start-Ups: Four Key Steps

1. Gather all records of financial transactions including deposits, vendor invoices, bank statements, purchases receipts and sales invoices.

2. Enter the data into journal ledgers or accounts.

3. Balance the accounts and remove discrepancies.

4. Close the books for the accounting period.


Key Bookkeeping Accounts

Cash Account

Small to medium sized businesses most often witness transactions in cash, which means business transactions will go through a cash account. The transactions will either be debited or credited to your account. At the end of the defined period of time, ideally a month, the bank account must be reconciled for any outstanding transactions or errors. It is important to note that it is ideal to close all discrepancies within the given month to prevent any confusion or stress later down the road.

Accounts Receivable

The money that is due from your customers must be tracked properly in order to receive and ensure timely payments. This can either be done manually by a bookkeeper or you can also incorporate bookkeeping software to know the current status of your transactions.

Inventory

Obviously, in order to know the status of your business’s inventory –  which could be raw goods, work-in-progress or ready-to-sell –  you must make sure that the actual inventory on hand agrees with your accounting records. Industry veterans recommend conducting physical counts of inventory to have a clear picture of your inventory records. Any discrepancies or variations found in the records can be a result of inaccurate tracking or, unfortunately, a result of employee fraud or theft.

Expenses Accounts

All of the expenses incurred by the business for a brief period of time, ideally a month, must be recorded properly in order to know the current expense status of your company. Some of the expenses may include rent, office expenses, petty expenses, insurance, marketing, cost of goods sold, etc.

Payroll Expenses

Undeniably, payroll expense is one of the biggest expenses for companies. This includes disbursement of salaries, bonuses, and other fringe benefits that fall under the payroll expense column in bookkeeping records.


Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.


When initiating a business, you might decide to put off many operational aspects until a later date. However, it is never too early to set up an unpretentious accounting function. Whether you’re tracing your bootstrapped expenses or revenues, it is never a wise choice to go too far in the process without launching an accounting system. It does not have to be a complex system, however, excel sheets won’t cut it. It is valuable to institute an accounting system that supports your business model and unique business needs while keeping a focus on your future goals and ambitions for your business.

Here are few ways to manage your accounting needs in the best way possible.

Set Up a Simple Accounting Function

When you are just initiating your business, you don’t yet require something fancy for your bookkeeping. There are many good options out on the market that are simple and convenient for a new business. Systems like QuickBooks and Xero are user-friendly and inexpensive, which is exactly what a business such as yours requires at this point in time. There are also some free options for you if you are short on cash, however, they will only offer very limited features.

A simple accounting function will take care of everything related to your payroll, invoicing, bookkeeping, and payments, which takes care of most of your basic needs. Be sure to check all features before implementing a system and ask for a demo so that you get a fair idea about its functionality.

Set a Chart of Accounts

It will suffice to say that the chart of accounts would form the core of whatever accounting system you use. It is basically a listing of all of the accounts that are included in the general ledger of a business. It helps you to locate specific accounts quickly and conveniently. It must be created to cater to the unique needs of your business and track income and expenses appropriately.

Open a Business Account 

Irrespective of the fact that your business is bringing in any revenue, you must get a business account right at the start. Personal and business finances must be kept separate at all times as this will save you from many troubles later. Banks, these days, offer online portals that can be used to manage your finances as you please. You can authorize your bank to make certain automated payments that are of high priority so that you never miss them. Moreover, the newly established accounting function has the capacity to integrate with your bank account, which can be extremely efficient for all of your business operations.

Hold On to your Receipts and Invoices

All invoices and receipts must be held and stored in a suitable place for future reference. Whether they are paper or electronic, develop a bookkeeping habit of properly storing all information and proof of your transactions. This will ensure that you have a headache free tax season at the year-end because it will be easier for you to account for everything.

Stay on Top of your Tax Obligations

This might be surprising, but you need to think about taxes in your accounting function even before you start sales. Your business must develop a good standing in terms of both a provincial and federal tax standpoint, including all fees and registration requirements. Your taxable income is your net income, which is deduced after deducting all expenses. This is why it is important to keep a record of all important documentation as it will make the whole process easier.

Stay on top of your payroll taxes and 1099s because that is the government’s money which you are assigned the task to hold. Therefore, you are required to account for it. Find a reputable tax expert along with your accounting function that can help you stay in acquiescence with your tax responsibilities and preemptive preparations to curtail the tax bite.

Create an Effective Payment Collection Process

Every business has an accounts collection system installed that manages accounts receivables. Your bookkeeping system must guide you with the open invoices and balances. All payment terms must be clearly highlighted on invoices. When collecting payments from your customers, be sure to remind them on the due date as well as 2-3 days before. Your clients should be clear about your payment terms because you cannot afford a negative cash flow at such an early stage of your business. Start with a simple payment collection accounting function and gradually start accepting checks and other forms of online payments.

Forecast for the Future

Projecting expected expenses will help you deal with the cash burn. Tracking how much runway you have in terms of cash allows you to better anticipate and plan for the future. An accounting function that can help you develop better future projections is essential in this day and age.  

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

A successful confident businessman thinking about decisions, standing in front of wall full with graph pie charts and calculations concept
Accounting and bookkeeping are the key functions in any business. Small businesses face challenges in accounting and bookkeeping procedures. Accounting is the systemic and comprehensive recording of financial operations in a business. Business bookkeeping is the recording of financial transactions as a part of the accounting process.

Entrepreneurs and business owners often do not see that common small business accounting mistakes are a major threat to the growth of their business in the long run.

Biggest Bookkeeping Challenges For Small Businesses

Not Using the Best Accounting Software

Choosing the correct software is among the biggest accounting challenges that small businesses can face. An important and challenging step in business is to choose the proper software per your business needs. Consider it’s cost, usability, and extra features when choosing a suitable bookkeeping software for your small business.

Features of an accounting software must include:

  • Inventory management
  • Sales tracking
  • Contacts management and contact history tracking
  • Account to accept credit card payments
  • Generating invoices
  • Financial statements, cash flow statements and balance sheet
  • Budget planning
  • Payrolls
  • Taxation matters

The cost of an accounting software is an important issue to consider. First, plan out your business needs and finances. Purchasing a costly software with highly-advanced features will not help your small business if you do not need these expensive features. A small business owner can plan to purchase an accounting software by providing a full payment at once or they have the option to make payments in installments or monthly payments. Plan to purchase the software that suits your business finances the best.

Financials are Incorrect

Incorrect financials is a threatening accounting problem in your business. If your financials are incorrect, it may sink your funding round in your business.

Any error in your financial statements leads to big loss. Business bookkeeping and other business operations will go into a mess if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be precise and related to the cash flow and balance sheet. Delayed data entry is a big risk of frauds and thefts.

Financials are not Produced Monthly

In a small business, it is often thought that it is okay to produce financials on a quarterly or bi-annual basis. However, monthly financials show investors that you are closely monitoring your business.

It can lead to negative balance if expenses are made but no income statement is updated. Invoices to be paid by the company may go unnoticed and it can put a bad reputation on a company. It can end terms with the suppliers. Business growth is halted or significantly reduced.

Business Owners mix Personal Finances with their Business Account

If you mix your personal and business finances, you cannot correctly estimate how much profit was generated out of your invested capital.  For example, if a business credit card is utilized for personal expenses during a trip or dinner, later on, this amount could be paid from the company’s income.


Covering Small Expenses out of Pocket without Recording

Paying  for business expenses out of your own pocket will eventually make your company look stronger in income than it actually is. It is extremely important to record everything so that you have a true picture of where your company stands financially.

Starting New Projects and Ideas without a Clear Budget

If you start a new project in your business without planning for it, you can easily run short of your budget for other business operations. You may have to quit the project in the middle if you don’t get the loan or find other investors. It’s important to always plan ahead before making big moves.  

Not Using Accounting Software or Cloud Technology

Failure to set up the correct software needed by your company leads to poor decision making. Installing the wrong (more complicated than required or lacking crucial functions) software can lead to more complexity in accounting. Accounting software prevents accounting and bookkeeping errors. Many software come with guided help boxes to make an accounting process easier to interpret. Inventory control tools are provided in software. Tax matters are made easier using accounting software.

Poor Interpretation of Accounting Information

Accounting information software is only a tool to use. Decisions must be made after completely checking the reports and interpreting the data. Data interpretation is made by comparing financial statements with the cash flow statements and balance sheets. This interpretation can be complex and hard to understand, therefore hiring a bookkeeping service may be ideal.

Entrepreneurs and business owners must focus on the long-term consequences of decisions they make after getting the full picture of accounting information. Making short term decisions after interpretation of accounts data does not provide the business with any long term benefits.


Conclusion

Small businesses face the biggest accounting challenges. Either they are running short on resources to keep an up to date accounting and bookkeeping picture or they are not using the correct software for their accounting. From choosing a proper accounting software to managing accounting tasks correctly as well as keeping them up to date are among the biggest accounting challenges that small businesses face.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

The report summarizes the result of business operation on computer screen and business people meeting.
Managerial Accounting, also called management or cost accounting, emphasizes on inside information received through financial accounting. Managerial accounting reports are used for planning, regulating, decision making, and measuring performance. These reports are continuously being generated throughout the accounting and bookkeeping period, according to requirements. Because many critical decisions depend on the authenticity of these reports, they should be carefully crafted by experts who are adept at bookkeeping. Managers then analyze these reports to highlight certain patterns and convert them into useful information for the company. Below is an explanation of certain such reports.

Budget Reports

Budget managerial accounting reports are very critical in measuring company performance and are generated as a whole for small businesses and, department wise, for large organizations. However, each company creates an overall budget to understand the grand scheme of their business. A budget estimate is made based on previous experiences, though, a great budget always caters for unforeseen circumstances that might arise. A company’s budget lists all sources of earnings and expenditures. A company tries to achieve its goals and mission while staying within the budgeted amount.

Managerial accounting reports related to budgeting can guide managers to offer better employee incentives, cut costs and renegotiate terms with vendors and suppliers. Therefore, a budget report is critical to any business.

Account Receivable Aging Reports

If your business relies heavily on extending credit, then account receivable aging reports are vital to it. Breaking down the remaining balances of your clients into specific time periods allows managers to identify the defaulters as well as find issues in the company collection process.  In the case that there are many defaulters, then the company may need a complete transformation to tighter credit policies as cash flow is critical to the operation of any business. There is always some bad debt that needs to be written off, however, you cannot make it a habit. You must always know who owes you what.

Cost Managerial Accounting Reports

Managerial accounting computes the costs of articles that are manufactured. All raw material costs, overhead, labor and any added costs are taken into deliberation. The totals are divided by the amounts of products produced. A cost report offers a summary of all of this information. This report offers managers the capacity to realize the cost prices of items versus their selling prices. Profit margins are estimated and monitored through these reports as you have a clear picture of all of the costs that went into the production or procurement of the articles.

Inventory waste, hourly labor costs, and overhead costs are also part of cost managerial accounting reports. They provide an exact understanding of all expenses, which is essential for better optimization of resources among all departments.

Performance Reports

Performance reports are created to review the performance of a company as a whole as well as for each employee at the end of a term. Departmental performance reports are also generated in large organizations. Managers use these performance reports to make key strategic decisions about the future of the organization. Individuals are often awarded for their commitment to the organization and under performers are laid off or dealt with as required. Performance-related managerial accounting reports also offer deep insight into the working of a company. If you think that you should be performing in a certain capacity but somehow that is not happening, these reports can point you towards flaws in the setup. The role of performance reports is vital for any company to keep an accurate measure of their strategy towards their  mission.

Other Managerial Accounting Reports

Order information reports, project reports, competitor’s analysis and many other similar reports are vital to every business. They are either generated internally or outsourced through professionals. The best course of action depends upon your capabilities to handle the reporting requirements of your firm. The ideal choice can differ for everyone but professional services do have the experience and skills to carry out this task better. In order to attain the most out of their decisions, your managers must have access to credible and authentic managerial accounting reports. 

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

QuickBooks


QuickBooks has proven to be a useful invention in the discipline of accounting and bookkeeping, especially for incumbents and small businesses. Despite the market being flooded by many similar accounting software, such as Xero, Wave, FreshBooks etc., QuickBooks has taken the lead by transcending the competition. It has been the most favorable among small business owners. It’s several versions are catering to multiple business needs that other competing software lack to date. Its transcendence in the market for serving small businesses are attributed to the following reasons.

Diversity & Flexibility

QuickBooks is available in different versions allowing for greater diversity in serving small businesses. Small business owners can choose from an array of versions depending on their unique business needs and specifications. For instance, QuickBooks Pro, QuickBooks Online Plus, QuickBooks Mac, QuickBooks Hosting, QuickBooks Premier Hosting and the sort. Each one comes with a unique set of features to enable businesses to choose the one that fits best with their business needs. The various versions may be purchased according to one’s budget as well, allowing for even more flexibility. Hence, QuickBooks leads the competition through flexibility in pricing and features.

User Friendly

Another reason for this market transcendence is the user friendly interface that it comes with, allowing for easy access and use within the business. Employees working on a legacy system are generally more resistant to change. Traditional bookkeeping has been popularly replaced by accounting software which may be a source of intimidation for employees at work. However, QuickBooks helps with the initial phase of using the software step-by-step and also extends the option to seek professional help, if need be.

Compatibility

QuickBooks offers a compatible interface that may be integrated with multiple vertical market applications easily and without much trouble. This superior compatibility helps with aligning and streamlining every single process within the organization and allows for savings in terms of cost, time and effort. Automation sounds like a brilliant idea when it comes to accounting, but automation to this extent is no less than a miracle for small businesses.

Customization

In addition to the above reasons, QuickBooks has been successfully outperforming the competition due to its ability to customize almost everything related to accounting and bookkeeping. One can customize a chart of accounts to their specific business needs, customize invoices, sale receipts, and estimates. You name it and QuickBooks has it covered! It sure is a one-stop solution for all your tedious accounting hustles.

Simplification of Tasks

QuickBooks has been an innovation in the market to help serve small business needs related to complicated and enervating accounting procedures and activities. Not only has it provided a complete and sorted package for A to Z accounting but it has helped with simplifying complex spreadsheets, returns filling, reconciling, invoicing, and financial reporting tasks throughout organizations, especially for small businesses.

Unlimited Features

QuickBooks has also taken over full responsibility for performing all of the accounting tasks with the provision of its various features. It manages cash flows, invoicing, billing, receivables and payables, employee performance, bank transactions, check printing, online banking, emails, payroll as well as financial reporting. Other features include access to its online version from any and all internet-enabled devices. This is particularly useful for small businesses that are operated remotely.

Business Tracking

Another one of the many reasons why QuickBooks has led the market competition is the streamlining and automation that it has facilitated for small businesses. With its use, business owners have been empowered as they can now track each and every business transaction and workflow hassle-free and in a seamless manner. This has enabled a transparent work environment for small business owners.

Conclusion

Therefore, based on the numerous reasons identified above, QuickBooks has remained victorious in establishing a position for itself in the market – a position that transcends that of any competitor serving small businesses.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

Handwritten Accounting ledger showing bookkeeping using pencil and calculator.
With the advent of accounting back in time, one of the most prominent words that made its way into the business dictionary was bookkeeping. Bookkeeping, in its broadest terms, is the process of keeping a record of all financial transactions of the business. This process requires drawing up several accounts that contain various transactions taking place within the business. The process of bookkeeping in accounting has been a tedious task since its inception, as it requires drawing up several individual t-accounts to record journal entries for the five major accounting elements – assets, liabilities, capital, expenses, and revenues. An important and commonly used classification is that of Ledgers, General Ledger and Sub Ledger. In order to advance the discussion on General Ledger, a brief description regarding the functionality of the ledgers is necessary.

What is a Ledger?

In accounting, a ledger refers to a record of transactions documented in a chronological order. These transactions are captured from the journal and are organized by account heads. These ledgers basically provide a historical and current summary of each transaction related to a specific account. This summary is considered to be the most reliable source for drawing up the financial statement at the year end. For instance, the sales ledger has all the sales related transactions. Sales return ledger maintains transactions related to sales returns. Therefore, the sales figure displayed onto the Profit and Loss Account may be verified from the sales ledger directly.

What is a General Ledger?

As previously identified, cash related transactions will have their own cash ledger and sales related transactions will be contained in a sales ledger. The General Ledger is one big master account that comprises of data from these individual ledgers, compiled together, in a single format. The General Ledger is also known as the book of final entry. The General Ledger is used to post information on financial statements – Balance Sheet and Profit and Loss Account of the business.

Sub Ledgers is yet another related category in accounting and bookkeeping, sometimes known as the subsidiary ledgers. Updating the sub ledger is similar to updating a General Ledger, however, unlike the General Ledger, Sub Ledger comprises of just a few accounts.

Format of a General Ledger

In recent times, automation and use of accounting software has made the traditional form of bookkeeping outdated. Traditionally, a General Ledger used to resemble a register or book, where all the transactional data was kept. Each account would occupy one page in the General Ledger and the General Ledger comprised of all accounts mentioned in the Chart of Accounts.

The format of a General Ledger included five different columns for each heading. The main headings would include Date, Transaction Details, Debit, Credit, and Balance. The header would usually include the name of the account and its given number. An updated General Ledger would demonstrate the current balance of each account as on that particular date.

Accounting Software

For all businesses, a traditional depiction of the General Ledger is likely to be more comprehensive, as given above. In the present era, traditional bookkeeping has become obsolete. The introduction of accounting software has made accounting and bookkeeping an automated process where numerous business transactions may be recorded and posted to their respective accounts simultaneously, without the need to manually post entries into the relevant account heads. This allows for speed, accuracy and cost saving. Enterprise Resource Planning (ERP) solutions, such as SAP and Oracle, have revolutionized the accounting world at its core. The computer software automatically posts entries onto the General Ledger from the respective account ledgers and calculates the current balances according to the specified date. 

Hence, understanding the functionality as well as the structure of a General Ledger is crucial to business accounting procedures. The simplest form of its explanation has been provided here.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Close-up Of A Businessperson's Hand Checking Invoice On Computer At Workplace
An accounting system is an assemblage of interconnected processes intended to amass, organize, and account for an organization’s transactions. The ultimate goal of this bookkeeping system is to engender informative reports to sustenance an organization’s decision making. Managers can make well-informed decisions based on the knowledge they gather from these reports, which are generated through an automated system.  

In order to assimilate a novel and efficient system of accounting into your business, you should follow a step-by-step approach.  The implementation of this approach for your accounting system includes a series of steps that must be undertaken before you are ready to go digital and say goodbye to your old ledgers.

The following list of steps is a theoretical impression for the implementation process in a standard organization. Factors such as the proficiency of your IT department, available resources, and ability to adapt to change will influence the design and related implementation stages that are essential to achieving the go-live plan.

Plan for Implementing an Accounting System

Before you start with anything else, it is imperative to devise a proposal in the form of a project plan and perform a cost-benefit analysis of the whole project. Rest assured, the benefits far outreach the costs if you are serious about running a professional business. The plan should include the timelines, key milestones to be achieved, and a list of all required resources for the project. Planning is the most critical phase of the whole implementation because key details need to be kept in mind for everything to go smoothly.

Hire a Project Manager

An implementation of an accounting system has to be managed carefully. You must designate an individual who serves as a project manager. The job of the project manager is to lead the entire process and form cross-functional teams. Members of the team represent all of the departments that have a vested interest in the system who will be using it in one way or another. Since these departments will eventually be the end users, it is vital to have their input in the implementation process.

Tidy Records in the Previous Accounting System

Bad data is one of the main reasons for nuisances when you move over to a new system. If you know there is imprecision in your books, bad transaction coding, invoicing issues, and other areas that need to be fixed, you should always prioritize this.

Trying to start fresh without getting rid of old mistakes can result in a huge blunder. Even the best system in the world would not be able to help you if you have issues related to the credibility of your data. The project manager is responsible for designating a special team with the sole job of removing bad clusters of data and repairing them for reuse in the new accounting system.

Data Migration and Pilot Testing

As most of your old data needs to be transferred to the new system, a data conversion plan must be devised. Mapping the data according to the new format is the key highlight of a conversion plan. Depending on the format support of both the old and new systems, the conversion can vary from being relatively simple to highly complex. Therefore, before you choose the new system, it is important to gather all of the technical details about it in order to avoid complications later on.

Once all data is transferred, the accounting system needs to be pilot tested in order to ensure that it is working perfectly. Apart from being technically sound, you need to acquaint the key people in your company with the new system so that they can efficiently work with it. Arrange a conference room pilot testing for everyone so that they can learn about the key features from an expert hands on. You may need to hire someone for the training session or you can do it yourself.

Configure and Generate Reports

Once everyone is on the same page and your employees understand how to work with the new system, it’s time to configure it to their devices and reap all of the benefits. The new accounting system will be able to generate better, more detailed financial reports such as balance sheets, income statements, cash flows and other reports that can greatly assist you in making key decisions for your business.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Businessman climbing the corporate ladder of success

1. Market Knowledge

How well do you truly know your market? Remember that it isn’t as straightforward as having decided the sort of item or service you plan to sell– finding your own particular specialty is critical. For instance, www.ties.com is one such brand. By concentrating on a solitary article of clothing, the brand developed to end up noticeably as an online market pioneer, providing the biggest collection of neck wear over the globe.

Deploying resources into a brand journey and digging up market data will help characterize and make your product distinct from competitors. It will likewise guarantee that your customers will see, hear and recall you over all of the market clamor. Know your opposition and know them well. Break down their qualities, gauge their oversights, and benefit as much as possible from the information available through bookkeeping data. It provides a visit inside the mind of an entrepreneur.

 

2. Setting Up and Winning Acknowledgment

Being a brand name isn’t the same as a recognized name. Gone are the days when it was sufficient to simply have an item in the market– your group of potential customers demand and request all the more today. What does your image represent? Is it true that you are representing your brand on a stage your market is listening to? The present group of customers are enthused about becoming more acquainted with their brands from web-based social networking to shelves and beyond. They expect an educational, ambitious and energizing client journey. Distinguished as the UK’s best narrating brand of 2015, Apple is the best case there is. From practically reinventing phones to realistic stories of how Apple items could change the world, their extraordinary products tell remarkable tales. For any business, it is an efficient bookkeeping strategy that can lead to the best business story for customers. No business has ever gone on to establish a strong brand image without compliance to accounting and financial standards. It is compliance with these which leads to a balanced scorecard for a business.

 

3. Developing a Digital Presence

The vast majority of marketers agree that social media is vital for their business. While this is something a ton of brands have still not got on to, customers around the world over invest time on the web. Basically, it is important to achieve your market on their medium of choice and a digital platform offers organizations different chances to creatively present brand identity, story and service offerings. Investigate your alternatives with easy to use sites and online networking stages like Facebook, Instagram and Twitter. All of which effectively encourage people to cooperate and engage with SMEs. In the same instance, it is also efficient to ensure that accounting statements are also available online. This is part of an efficient bookkeeping strategy.

 

4. Putting Resources into Assets

Concentrate on what you specialize in. Endeavoring to do everything internally isn’t always the best approach, particularly when you’re attempting to build up a solid footing in the market. Energize associations that draw out the best in your business and help it prosper and grow. This won’t just line up with your general business strategy but also helps connect your audience in a more productive way.  

 

5. Less Expensive isn’t Generally Better

Assess your choices admirably and don’t decide on less expensive choices, simply in light of the fact that they exist. Concentrate on three key components; what will give your item or service more esteem, what will give your gathering of people a wealthier client encounter, and what will fabricate your image loyalty– this will help control your decisions when choices are simply taken on the basis of book.

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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Gorgeous caucasian female on concrete background with creative success sketch and light bulb. Business idea concept
Reevaluate Your Business – Even in the start-up

It is not mandatory to have a large, innovative organization to reinvent your business. Truth be told, the smaller and leaner the business is, the quicker it is to change gears and adapt to the rapidly changing environment. There is greater flexibility in the start-up for a business to respond to paradigm changes in consumer demands.

Entrepreneurs need to consider the following areas: Do clients still need and purchase a similar sort of items or services you offer? Have industries and practices changed since the start-up of business? Does the entrepreneur have sufficient awareness of changes in business practices? If not, what changes should be done to make the business competitive?

Is there a need to launch new products and services? Try not to speculate what clients need and will pay for it. Break down your current sales and interact with real clients and prospects. What do they require? What would you be able to give? What’s an ideal approach to convey answers for them? What will acquire the most profit? Is there a specific specialty that the business can specialize in?

Provided that this is true, entrepreneurs need to consider how customers can be targeted and what other products can be launched in the target market.

Sales over the Internet

Is the entrepreneur offering their products and services on the web? If not, then what are the reasons for not doing so? If the sales are declining and there are no offers available on the web or capturing leads online, it’s an ideal opportunity to capitalize on this opportunity. Notwithstanding when individuals purchase face to face or by individual connections, they are probably going to explore the items, organization or consultant online before settling on a choice on what to purchase and from whom to get it. If you have a business, a website is a must. The kind of website and what ought to be on it relies upon what the entrepreneur has to offer. However, an efficient bookkeeping method also needs to be in place to account for online sales. This aspect has to be evaluated as part of the many start-up tasks.

Get Involved in Social Media

Do you have an online networking presence? Online networking may not be everyone’s cup of tea, but the Pew Internet Social Media Update in 2016 found that 68% of all U.S. adults (i.e., Internet clients and non-Internet clients) are Facebook clients. While 28% of these clients utilize Instagram, 26% utilize Pinterest, 25% utilize LinkedIn, and 21% utilize Twitter.

Discover which of the web-based social networking locales pulls in the type of clients you need to reach and, after that, it is important to get active in those channels. Post remarks, answer questions, begin discourses identified with your products and industry. If you don’t have time for all of this, consider having a trusted staff to handle the web-based social networking assignments. Consider publicizing via web-based networking media destinations, as well. The social media activities need to be launched from day one of the businesses start-up.

Contact Former Customers

Try not to accept that a previous client who did not purchase from you in the business start-up will never purchase from you again. Clients’ needs and conditions change, just like that of an entrepreneur. The mega corporation that didn’t renew your agreement a few years back on account of changing business needs may have altered their course of action and could be a decent prospect now. The client who might have considered a lower-priced competitor might be disappointed with the quality of service and be responsive to a call from you today. Bookkeeping previous records of the former customer can reveal how greater gains can be made in the present.

Contact Competitors of Present or Former Customers

On the off chance that an organization needs what you offer, there’s a decent shot that their rivals do as well. Industry groups that you belong to such as trade shows, seminars and friends in the industry would all be able to assist you to distinguish likely prospects. On the off chance that the target market approached in the start-up doesn’t require your products or services, inquire as to what their specific expectations and requirements are. To account for this, non-financial bookkeeping is also important to be conducted.

Sell Additional Products and Services to Existing Customers

Regularly, the simplest approach to acquiring new business is to sell more to your current clients. You might have the capacity to sell additional products to a similar contract or sell a similar product to an alternate division of the organization. Or, there is also the possibility to sell related items and services to the client. Keep your eyes and ears open for new opportunities.  It needs to be ensured that clients know about the dynamism of the business right from its start-up.

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About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.