Bookkeeping, Recording Of Income & Expenses, Tax management

Bookkeeping, Recording Of Income & Expenses, Tax management

- in Business Studies

Every business needs to keep records of income and expenses which are the two main variables,  accounting for a business is the like the heart of a human body, without it, the body cannot function. In this topic, we will examine the benefits of keeping accounting records and look into different areas of how accounting can help a business to maintain its records and also for tax purposes. Most businesses now use an accountant to do their bookkeeping and look after their accounts and submit the relevant documentation to the revenue office as required.

An accountant will help the business look after its income and expenses and will also produce the company’s profit and loss account at the year-end. Accountants will also identify ways or reducing tax liability and maximizing profits for the business in lines with the rules and regulations.

Cash flow forecast – this is where a company will record all the incomes for the business on a spreadsheet to monitor cash coming in to the business, when companies go to the banks for loans to expand their business the cash flow forecast can help identify how well the business is doing which will support the loan application for borrowing.

Business owners will need to have a good understanding of the principals of finance to maintain their company. Consumers are the key to any business as well as investors. Raising capital can help a business rapidly expand and diversify its activities in different area expanding its horizon and achieving their own goals.

Finance is important to an organisation the firm will need to look at its balance sheets and cost making sure that it pays its creditors on time and has the cash surplus in order to do this for example bills are paid on time, expenses are paid on time without having an impact on the business.

There is famous saying ‘no risk no reward’ if you as an individual are not willing to take the risk you may not be able to succeed, this may not be in all cases however the majority of the time the risk is worth the rewards.

Lets look at an example of investing in a business, the important aspect here is to do your market research on the business that you are investing in, for example, look in to how successful the company is, how much profit the company is making, what is the future plans for the company in terms of growth. So
these are a few aspects that an individual may need to look in to before investing, other key importance will be to look at the profit and loss account and balance sheet of that business you are looking to invest in, look at how profitable the company is, what do their accounts tell you about their trading.

After making the investment taking into consideration the above points you may be ahead of the game in your research before putting your money in. The risk is based on how much you intend to invest the reward is on the outcome of what your returns will be.

The phrase ‘Cash Is King’ refers to cash being the ultimatum king of everything. Anywhere you go anything you do, every single thing requires cash, whether it’s from buying goods or services to paying your bills, everything comes down to cash. Therefore it is important to build cash so that you have the ability to do what you want when you want. Cash is power without it the world sits still.

Let us look at the markets for example when share prices go up for a particular company or goes down it all depends upon the profits the company is making which come from the sales the organisation is making which then comes from the number of customers spending, so we know that cash drives almost
everything without it the world would come to a standstill, imagine not having cash will you be able to purchase food, go out to eat, buy products or services, pay your bills and other expenditures, the answer is ‘NO’ you will be at a standstill, so it is important to remember that cash will always be king.

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