Vicky is the owner of a multi-purpose venue and is a small business owner looking to expand soon. One of the pitfalls of owning her own organisation has been that she has not been able to maintain her books effectively.
One of the problems is that her turnaround time is too slow in terms of responding to enquiries about the venue. She has also been slow in generating invoices when due, which has somehow left her chasing payments. Her record keeping system is shoddy and the cracks are starting to show.
She needs to understand that record keeping is the foundation of accounting.
Before she can hire the services of s bookkeeper or accountant, she needs to know how to maintain her records well. This will save her valuable time and money in the long run. Rather than having to spend money on paying an accountant by the hour, having a good record keeping system in place, she could budget a reasonable amount of time and money towards this service.
What is record keeping?
This is the process of recording transactions and events in an accounting system. The data should be accurate and thorough.
Accounting processes are no longer done manually but are automated. Many people often use the terms for accounting and record keeping interchangeably, but they are not the same. Record keeping is a part of the broader definition of accounting.
Besides it being a critical component of running a business well, it enables you to have the data you need to make sound financial decisions.
The ideal record keeping system should:
- Be user-friendly
- Be Accurate
- Provide relevant information
- Be flexible to provide information in various ways
- Be computer-based