Understand The Business Financial Process - Accounting and Bookkeeping

The Accounting process involves recording, interpreting, classifying, analyzing, reporting and summarizing financial data. Bookkeeping is the process of recording financial transactions. Recording financial transactions is the first part of and the foundation of the accounting process. Bookkeepers handle the recording part of the accounting process. Accountants handle all parts of the accounting process.

Why good bookkeeping is important to the success of your business?

1. Help to make important decision for your business

By having a good and proper bookkeeping system, you can provide external users (such as investors, financial institution or government) access to reliable information and make better investment or lending decisions

2. Track profit and growth

With proper data, you can track and observe your business trends, you can gain better understanding of your business cycle, you can compare result by month, year or project basis

3. Required under the law

Having a good and proper bookkeeping not just for yourself or your business, it is also for the law. The law requires business owner to keep clean and clear financial records for your business.

4. Helps you do better budget

With everything is properly in-line, it helps you easily review your expenses and plan for future expense, which is what we call “budget”.