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Proper Bookkeeping Methods

Having strong books is vital to the financial health of your company. You must be able to manage your books appropriately in order to prevent your organization from struggling to make ends meet. When you do not have your bookkeeping system in place, you do not know how to budget and you really do not know how much money you need to generate in sales to break even. How much money do you have to pay for your marketing expenses? Can you afford to hire new employees? The right type of bookkeeping program will be able to help you understand all of the financial details for your company and can give you the information you need to make smarter financial decisions.

With bookkeeping you will have a system in place that will allow you to have detailed transactions and proper records that are necessary in order to help you make smarter financial decisions but to have the information you need to file taxes. Every company needs to have a bookkeeping system in place in order to succeed. Some of the things you will focus on include the following:
- Sales
- Purchases
- Payments
- Earnings

There are many other things that will relate to your bookkeeping and it differs for many companies based on your needs. There are multiple bookkeeping methods that you should consider as you are looking for a system that will help you to track your books appropriately. Here are some of the ways in which you can manage your books.

Using Single Entry Bookkeeping
A single entry method is commonly used as companies have basic needs to manage their books. With this system you have singular transactions to enter and it is a very basic layout to your books. QuickBooks is one of the programs that can really help you out with single entry bookkeeping or will help you with double entry as well. It can be expanded to your companies needs. With a single entry system you will have a simple system that shows cash, accounts payables, receivables, and taxes.

Using Double Entry Bookkeeping
Another bookkeeping method that is commonly used is known as double entry. This system is when you have 2 accounts to deal with. Usually you have debit and credit accounts for the company that both need to be maintained. The accounts need to match one another in order to provide you with the right results. If they accounts do not add up, it shows clearly that there is an issue and you have to go through your accounts until they match one another.

Managing The Books
With bookkeeping you need to have someone that can be in charge of managing them. You can hire a bookkeeper to come in and to manage your books, which is what a lot of companies will do as it makes it a lot easier than trying to have the owner do them as they have so many other things to deal with. If you hire a bookkeeper to manage the books, you need to really test them and to make sure they have the experience and knowledge necessary to prevent errors and other issues from arising. Make sure they understand how to use the accounting program that you are using (QuickBooks, etc.) in order to know you are hiring the right person. Will you continue to work with the bookkeeper to manage the books or will it be completely on them to manage the books? Can they generate the reports and things that you need for the marketing team? You have to know the skills that the bookkeeper has in order to provide you with the right results.

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