Top 8 Bookkeeping Practices for your Business

Mar 2019

Proficient bookkeeping practices help in the smooth working of a business. Bookkeeping and accounting services not only assist in the proper recording of all the business transactions but also provide the management with the knowledge as to where the funds and other resources would be utilised efficiently.

Having the accurate records will help in increasing the cash flow of the company and also provides excellent help while making any financial decisions. With the gradual increase in the number of businesses incorporating in the UAE, the count of bookkeeping services in Dubai is also rising. This provides an excellent opportunity for you to venture into the world of accounting and bookkeeping services. Let’s dive in to understand better.

What is Bookkeeping?

The bookkeeping stands as a process where you can record all the transactions and other financial activities of the business. The term accounting and bookkeeping are often substituted as they seem similar, but in actual they are not. Bookkeeping is a part of accounting and includes an only recording of all the financial transactions, whereas accounting comprises of scrutinising and presenting the data as received by the bookkeeping process. 

It is in a business’ best interest to use both these activities together as it would give a better result in understanding the overall position of the business. Being a businessman it becomes essential for you to understand the best practices that you need to implement in your company. Let’s have a look at them.

Best Practices of Bookkeeping

Some of the best practices of bookkeeping are mentioned below:

1.Keep Distinct Personal and Business Expenses

If you have the same bank account for the personal and business accounts, it can cause you many problems. It becomes a very time taking to find out your deductible expenses for the company and can be very confusing for you. Having dedicated accounts will enable you to determine the cash flow of the business and will make the process of budgeting very stress-free.

2.Plan for the Future

Bookkeeping allows the management to prepare for the future. It provides a detailed list of all the transactions which would not only help in understanding the financial picture of the business but also in setting the future goals of the business. Furthermore, it will be helpful in any mergers and acquisitions in the future.

3.Track Every Business Expense

Tracking every expense would help in segregating the taxable transactions from the non-taxable ones. This would lessen the time taken at the end of the financial year or when we are filing for taxes.

4.Take Professional Help

Hiring a professional may sound like an extravagant idea, but it can save your trouble. When there are numerous transactions conducted by the business, an experienced professional can keep track of all these trades without any hassle or mistake. This may not sound like a big deal but missing even one transaction may spell doom for the business. An experienced professional will have a better knowledge of the loopholes in the tax law or any additional tax deductions which will come in handy.

5.Conduct Self - Audit

Keeping a daily record of all the transactions will help in creating a picture of the financial health of the company. This would assist in reviewing our decisions for the business and take any corrective action if necessary. Keeping proper records of the transactions would also help at the time of an internal audit of the company.

6.Use a Bookkeeping and Accounting Software

The use of the software would automate most of the time taking and monotonous tasks of bookkeeping and accounting. The accounting software can also be easily and quickly updated with any new rule specific to a particular region or country. The use of software can make life very easy for the owner of the business.

7.Give Details

This is usually not done in businesses but having an appropriate description of the inventory helps in preventing misplacement or theft of the product. These details will also assist in gauging how useful the product is and the trend in the market.

8.Use Online Banking

Advancements in technology have been beneficial in businesses also. Now, you can do your banking transactions online without the hassle of going to the banks and standing in line. Online banking will also help you in generating reports in real time which would give you the current picture of the business transactions. You can even integrate your online banking account with your accounting software which would automatically and accurately record all the data.  

These are some of the steps which, if followed by you, will give you a keep your business working without any hitch and would assist in its growth and development.

Bookkeeping and accounting may seem like a small task, but it has a significant impact on the present and future of the business. It is because of this reason it is suggested that you acquire the services of a professional. Accounting outsourcing services provide you with professional expertise and will allow you to focus more on the business. If you are looking for such services, JAXA is here to assist you.

We at JAXA, understand your business and deliver customised solutions according to your business needs. Our business experts help in building specific plans to enhance your business growth. To know further about the other services provided by us, do contact us – we’d be happy to assist.