What is bookkeeping, really?

by Tom on May 14, 2012

Bookkeeping is you, once per week emptying out your pockets of the cash paid receipts before you put them through the laundry; taking a moment to clean out your wallet and going out to the car/truck and cleaning off the dashboard before they fade in the sun.

Place the receipts in a big brown envelope, a good bookkeeper has a box of them and would supply the envelope. Repeat weekly. Once per month, dump out the contents, sort by expense category; add tape them if you can. Put copies of your sales invoices in the envelope. Locate your business bank statement and put it in too.

Bookkeeping is almost as exciting as watching the grass grow as one well known insurance spokesman would say about insurance. Bookkeeping is similar to insurance. It insures against tax-it itis; a deadly financial disease that attacks your bank account and your pay cheque at least once in the life time of a small business. The infection can rapidly spread bringing to light the last ten years of your life.

Your protection is a legal term called adequate books and records. In Canadian taxation you are guilty until proven innocent. Simply take your envelopes to your nearest professional bookkeeper, preferably some one like us whom have a professional designation, adhere to a written code of ethics and are insured. Include your cheque, this could be as little as one hundred dollars plus tax per month.

We will process the contents of the envelope, reconcile the bank account and prepare the necessary government reports. Once complete we will send you, by fax preferred, a statement of income and expense and a statement of financial position called a balance sheet.

Bookkeeping provides you with insurance against tax-it is, costs a little more that medical insurance but provides peace of mind. Bookkeeping done honestly and regularly tells you where you have been and provides clues to where you are going.

Call you A Bookkeeper for a big brown envelope.

Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Tom Jarrold and Associates and a clickable link back to this page.

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