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Single Entry Bookkeeping

Single entry bookkeeping follows the saying that cash is king. Well, at least single entry bookkeeping only allows you to track cash, thus may make it seem like the most important aspect of your financial records. It could well be the truth, particularly if you are one of many people who rarely if ever deals in anything more than the real thing. The other option is called double entry bookkeeping. In the case of double entry bookkeeping, you would record the debits and credits, including both cash and other kinds of monetary transactions.

When you are balancing your checkbook, using the old ledger entry this is an example of single entry bookkeeping. You may feel that if you are running a mom and pop sandwich shop that you surely must need only to use single entry bookkeeping. The matter that enters is that if you are a corporation that you will need to also incorporate and establish the type of accounting method that you will use as well. There is cash basis accounting, which entails acknowledging the transaction at the time the money is received or paid out to a vendor, for instance. Accrual basis accounting, on the other hand, identifies the credit or debit at the time that it occurs. This is not necessarily when the money is in hand, though.

For many the simple fact of the matter is that they only need a bookkeeping company system, though. Again, that mom and pop shop or a small, one-woman jewelry maker and designer may have a very small business. For either of these situations single entry bookkeeping and cash basis accounting could suffice. Actually, they would not necessarily have accounting needs so much as the need for a solid bookkeeping system. In many cases, it may be wise to actually go ahead and hire a bookkeeping professional. They can provide a myriad of useful services for a business, whether it is big or small.

Services to Seek

A bookkeeping professional can take a look at the nature of your business, the size of the business, and the typical payment methods with which you will be dealing. This will help them determine whether single entry or double entry is best for you and your single person business or single mom and pop shop. Otherwise, you may be elevated unnecessarily by the lure of creating a corporation when you do not need one. This can actually force you to choose accrual basis accounting, and mess up your system. It can also create a false sense of size and complexity in terms of your taxes as well.

Thus, it is important that you seek out a professional to help you to determine the single entry bookkeeping that is best for you. It is far easier and wiser to hire a professional whom you can trust from the start. Make sure that you talk to some of their present clients before they become your professional of record. If they make a small mistake from the beginning, then it can cause some headaches down the road. Single entry bookkeeping may indeed be the best method for you, and it is good to find out for sure.

Comparing Professional Offerings

Therefore, you may want to go well beyond asking a professional whether you should opt for double or single entry bookkeeping. You may want to find out the best way to organize every single entry so that you can make it easy to complete your taxes quarterly or annually as well. In addition, you may also want to talk to an accountant because once you have established your accounting method, you may be with it for the long term. If you are likely to go beyond the single method, and likely to expand your business, then you may actually want a different method.

It is up to the professionals you hire to help you determine your needs now and in the future. It makes a difference how well they can help you to handle the decision making process. Fortunately from there you may then establish the best methods for you to keep up with the day to day transactions. The other matter of importance will include how you decide to keep track of single expenses as well. There are many various ways to take stock of your money and finances. Beyond that you may want to employ an accountant to help you determine when you are ready to expand and grow your business.

Single entry bookkeeping is just one method to keep track of your cash. It is often times utilized by smaller, cash-based businesses to account for their money. As your transactions grow in size and complexity, you may need to change the recording and accounting methods that you use. It is best to prepare for this ahead of time.