Monday, 22 February 2016

Keeping An Accurate Accounting Record

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It can be argued that accountancy can make or break a business. Governmental Agencies, mom and pop businesses and the most sophisticated financial organization realize the importance of keeping accurate accounting records. Not only to properly understand the economic state of their business, but also to help to make intelligent decisions regarding how to grow and where to deploy resources. Surprisingly, while this point of view is widely maintained, it lacks in its execution more than it should. Each Organization should design its own record-keeping system, but certain basics should always be factored into the design. Some examples regarding basic records that should be considered when designing an accounting record keeping system are listed below:

Accounting and tax records can consist of a lot of data and be very extensive. However, there are many business accounting software packages that can help consolidate all of that information. These applications require a basic knowledge of accounting and are well worth the cost of implementing based on the time, effort and resources that can be saved in the long run.

Contracts: Contracts are the building blocks to most corporate relationships. Businesses that provide services use contracts to identify the services to be provided, the means of delivery and the acceptable standards associated with the service, its delivery and the related costs. Similarly, enterprises that produce products draw up contracts establishing similar parameters for the products that they produce and sell. Employment contracts are also used extensively in business and govern the relationship between the employee and employer. In short, Contracts stipulate the terms of the business relationship, and identify the responsibilities of each party.

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While these represent just two aspects to consider when developing a robust recordkeeping system, they represent the building blocks for almost every type of business entity.

Lewis Daidone is a CPA known for his integrity and wide ranging experience working with Boards and other professionals helping entrepreneurial companies achieve success.. For more information, subscribe to this Facebook page.