Small Business Accounting Software Accounting Same simple spreadsheets

Accounting software is used by accountants to enter many complex financial transactions in the books of account and is almost always based on principles of double entry bookkeeping. A major advantage for companies and staff of finance is the extent to which the financial information contained in the database can be queried for financial control purposes.

An accountant needs to not only ensure financial records are accurate, but also recoup some of the accounting records to answer accounting questions on the accounts, provide a legal basis for transactions and report periodic reports at regular intervals.

The small business has different accounting needs which are better described as bookkeeping accounting. For non limited companies that do not need to produce a budget then a simple income and expenditure account can be produced much simpler using single entry accounting principles.

Less financial control is often required by small business accounting software accounting as is often the owner manager who already has a thorough knowledge of every transaction. The books are still needed for tax purposes and the requirement to prepare a solid set of accounting books for tax purposes is that each entry is supported by evidence from third parties.

Examples of third party evidence would be sales invoices, purchases invoices and bank statements. Financial transactions where no receipt exists can still be recorded in the books business, although all transactions not carrying third party evidence could subsequently be allowed for tax purposes and certainly would be if the amounts entered indicated unusual income or spending.

Producing a statement of income and expenditure accounts using single entry is little more to make two lists of financial transactions. Those lists being one of the sales revenue received from sales invoices or receipts issued to customers and the other is the cost of acquisition by purchase invoices received from suppliers.

To record income from the sale would not normally be sufficient to simply add the total of the invoices as such a sum does not leave an audit trail of entries that have been included. A written list of sales invoices provides an audit trail.

Accounting for sales of a small business can be a manual list of sales invoices or using a spreadsheet package a list can be done on a spreadsheet accounting. Using a spreadsheet for the bookkeeping has its advantages as simple formula can be used to sum the column totals.

The information essential for entering a sales invoice is the date of sale, customer name, invoice number, if applicable and optional a brief description of the product sold. In the next column would be the sum total of the sales invoice. If the elements, such as value added tax must be represented, then an additional column would be needed to accommodate the VAT or sales tax accounting.

A further small complication might be if at the discretion of the small business owner additional information was requested by the accounting records to indicate the totals of the different types of products and services then additional columns could be incorporated to include the net sales figures in these columns.

There is then a simple list of sales invoices to meet the needs of sales accounting for a small business where a balance sheet is not required.

On the expenditure side of the business accounting can be a simple list of purchase invoices and receipts showing the amount spent. The list should also produce an audit trail, showing the date of the invoice, the vendor name, invoice for identification purposes and the total amount spent.

Generally tax returns are the main purpose of producing small business accounts and invariably some analysis is required to show what the costs were spent. It is not difficult to achieve and how the sales are the owner operator may add additional standard columns to the spreadsheet accounting.

The columns of expenditure of analysis should not be a different column for each type of expenditure. It 'better to set up columns and group analysis of securities that can accommodate all general expenses.

These columns may include shares, other direct costs, local costs, administrative overheads, transport and delivery costs, repairs and maintenance, travel expenses and hotel costs, motor, banking and legal fees and other expenses. It 's better not to put too many items under a general heading of other expenses such as this is more likely to be investigated how the type of expenditure have not been precisely identified.

A column is also important to include purchases of assets included in fixed assets usually have different tax rules applying to claim against taxes and spending must be separated from other expenses.

After having established the two-sheet accounting task is therefore to produce the income and expenditure account for the collection of the total of each column analysis. The total sales revenue from which is deducted the total of each classification of total expenditure with the result that the net profit and loss of business.

Where stock is bought and sold a further adjustment may be required to explain the difference between opening and closing stocks. This is done by taking a physical inventory and valuation of the stock at the beginning and end of financial period.

On account of income and expenditure to adjust the stock purchases figure by adding the value of opening stock and deducting the value of the stock closing. The result is the total stock purchases, as shown in the accounting sheets, but the cost of goods that were sold to produce revenues were reported.

Accounting for one simple purpose of small businesses may be two lists of sales and purchases supported by invoices and purchase invoices .......