10 Bookkeeping Basics You Should Never Ignore

Running a small business is no easy task. As the owner, you must take a bird-eye view of your transactions to analyze your operations, gather insights and make strategic plans for the future. However, tracking your money, liabilities, assets, and more can be more challenging when you have several aspects to manage. If time is your constraint, you can find reputable firms that offer bookkeeping services in Toronto. However, before you hire a professional bookkeeping services provider, you must understand the basics thoroughly. Learn about ten fundamental principles of bookkeeping that you should never ignore.

Basics of Bookkeeping to Keep Track of Your Transactions

1) Understand the Cash Flow

Even in the present world of digital payments, businesses are still dealing with cash. You must have a clear view of all your cash transactions. If you have an accountant, they will show you two registers – one that records all Cash Receipts and the other that monitors Cash Disbursements.

2) Maintain an Accounts Receivable Log

If you give your customers the option to shop and pay later, you must keep an accounts receivables log. Ensure it is updated after every sale so that you send out timely and accurate invoices to your customers. This way, you will not fall behind on the payments due to you.

If you need help with this, you can get in touch with the specialists at Apex Accounting. We offer complete bookkeeping services for small businesses.

3) Keep a Check on the Inventory Records

Even as you keep a tab of the items you are selling, you must keep an eye on the products you have not sold. This is another critical element that your bookkeeper will include in their register. Analyzing the details will help you identify the products that do not sell as much and understand the demand and trends in the market.

4) Have a Clear View of Accounts Payable

The Accounts Payable keeps you updated on the payments you are to make. The importance of this account is that you will have a clear view of the amount due and help avoid unnecessary delays and credits.

5) Keep Your Loans Account Updated

Your days may get busy, but it should never be an excuse not to update your loans account. If you have taken a loan, paying the installments on time is critical for the credit safety of your business. Most owners struggle with documenting all the information as they have several other things to manage. If you are in a similar dilemma, look for professionals who offer small business accounting services.

6) Record All Sales Timely

Maintaining proper sales records will give you a clear picture of how your business is doing. Over time, you can use the data to take a more strategic approach and make your business more profitable.

7) Maintain an Updated Purchases Account

Purchase accounts are a critical aspect as they are instrumental in calculating the Cost of Goods Sold. On reducing this from your Sales data, you arrive at the information that helps you understand the gross profit for your business.

8) Keep Your Payroll Account Accurate

It helps to update the Payroll accounts regularly to eliminate issues regarding tax requirements and other government regulations. Many small business owners find this to be a daunting task, which is why it is beneficial to get hold of professionals who can provide bookkeeping services for small businesses.

9) Be Aware of Your Net Assets

Net Assets also called the Owner’s Equity, is a log that will give you the details of the amount of money you put into the business. This data also tells you how much money you have as an owner after reducing the liabilities from assets.

10) Keep Information from Retained Earnings Handy

The Retained Earnings account helps you track the profits your company re-invests into the business. This information is particularly critical to investors and lenders who monitor your business and invest in it.

Let Us Help You Take Care of Your Bookkeeping!

Apex Accounting is one of the most trusted names for bookkeeping in Toronto. We provide bookkeeping, accounting, payroll services, and tax consulting services in the city. We have specialists to ensure your books are up-to-date and reflect an accurate picture.

For more information, you can get in touch with us by calling on (647) 979 7728 or writing to us at info@apexaccounting.ca.