{"id":1700,"date":"2023-03-21T10:18:19","date_gmt":"2023-03-20T21:18:19","guid":{"rendered":"https:\/\/marketingwebsite.afirmo.com\/nz\/?p=1700"},"modified":"2023-05-25T14:15:31","modified_gmt":"2023-05-25T02:15:31","slug":"bookkeeping-for-small-businesses","status":"publish","type":"post","link":"https:\/\/www.afirmo.com\/nz\/resources\/bookkeeping-for-small-businesses\/","title":{"rendered":"Bookkeeping for small businesses"},"content":{"rendered":"

Why is it called bookkeeping?<\/h3>\n

The name comes from the days when everything was done with pen and paper. Businesses recorded all money transactions in daybooks, cash books and journals. These transactions were then re-written into a single record for the business, known as a ledger. These days, bookkeeping is typically done using smart software packages like Afirmo\u2019s Sales and Money Tools.\u00a0<\/span><\/p>\n

What\u2019s the difference between bookkeeping and accounting?<\/h3>\n

Bookkeeping usually refers to capturing all transactions and allocating them to particular types of income and expenditure, known as accounts. The accounts are usually based on what you want to track in your business as well as making it easy to file tax returns. Expenditure accounts might include things like vehicle expenses, repairs and maintenance, electricity and gas, mobile phones, printing postage and stationery, advertising, subscriptions, raw materials and so on.<\/span><\/p>\n

Accounting uses the data captured by bookkeeping to summarise, interpret and prepare reports on the financial side of a business. In this sense, bookkeeping is an essential part of accounting. Accounting creates important views of financial performance through standard business reports, such as a balance sheet, profit and loss statement, and a cash flow statement. Accounting also includes the preparation of GST and income tax returns for Inland Revenue.<\/span><\/p>\n

How often should you do bookkeeping?<\/h3>\n

When you\u2019re busy working in your business, it can be difficult to make bookkeeping a priority. This is particularly true if you see it as boring and unproductive. You may feel you always have an instinctive idea of how the business is going, but the numbers provide the certainty a business needs for success.<\/span><\/p>\n

Keeping your bookkeeping up-to-date lets you see your business as it is, not how it was some time in the past. It also means you\u2019re dealing with income and expenditure transactions while they\u2019re fresh in your mind, so it\u2019s easier to recognise what they\u2019re for and allocate them to the right accounts.<\/span><\/p>\n

How often you should do bookkeeping will also depend on how many transactions your business generates. Most people find it easier if they get into a routine of doing a little bookkeeping at a set time every day or once a week.\u00a0<\/span><\/p>\n

Here are some of the bookkeeping benefits to keep in mind:<\/span><\/p>\n