Financial record-keeping systems can be manual or digital. In the past, manual systems were the way to go, but with technological developments there have been vast changes to how these systems are run.
Some smaller business entities are still relying on manual financial record-keeping systems and this is not a problem as long as all information is accurate.
No matter which option is selected, the system should give accurate information.
What these systems comprise of:
Proof of tracking of sales or spending. The documents should include accurate descriptions, dates and amounts involved. These records are highly useful for monitoring cash flow as well as credit standing, so having as much detailed information as possible is important. Documents included must provide all details required about suppliers, current expenses, sources of income and creditors.
Information that is recorded. You can do this yourself or hand the duties over to a bookkeeper. A key component is making sure that the relevant information is recorded. This information will then be used by the bookkeeper to compile the relevant financial statements. The system that is used to record and store this information should be organised systematically so that the bookkeeper won’t have to spend too much time making enquiries.
Financial records should be printed out. This includes an income statement, balance sheet, accounts receivable and accounts payable statements. Once the information has been inputted into the relevant software programme, it should then be printed out. This information can then be used to compare to previous months or years. Decision-makers within the organisation should use what is contained in these financial statements to make decisions that will benefit business-functioning. It will also be key when engaging potential investors about putting funds into the company.