Bookkeeping is one of the most important operations carried out within a business establishment. It consists in recording all the accounting documents of a company according to the standard of the accounting plan. Bookkeeping is something that every successful business has to do to stay afloat.
If this operation is done in a traditional way by a chartered accountant, it is also possible for the head of the company to take care of the bookkeeping of his commercial establishment himself. How to keep the accounts of a sole proprietorship? So, without further ado, let’s dive into this blog and learn some of the things you ought to know about a sole proprietorship.
1. Find out about the accounting obligations of your business establishment
If you decide to manage the accounting of your business by yourself, you must first inform yourself about the accounting obligations that apply to your business. These obligations are related to the tax regime under which your company’s profits are taxed. If you have trouble understanding this, you can consult a chartered accountant to find out what you need to know.
2. Take a training course on how to manage the accounting of a company
If you choose to take care of your company’s accounting yourself, you need to be sure that you have the necessary skills to do it properly and without wasting time. If you have the skills to do the job, you can record the transactions during the year before entrusting a public accountant with the year-end work. The specialist will then simply check that your work is in order. After that, he will be able to establish your balance sheet. If there is any doubt, you’d better train in accounting.
3. Choose your accounting software
If you want to take care of your accounting yourself, you must use accounting software. Most entrepreneurs today use virtual accounting applications, accessible by subscription. Depending on your application and your options, you will find it more or less difficult to keep your accounts. You can simplify your work by choosing an application that offers you the possibility to:
- Automatically generate your sales entries in accounting when you edit a sales invoice
- Automatically integrate your banking operations into your accounting
In fact, in order for you to be able to take care of your accounting yourself, your application must allow you to:
- Edit your annual accounts when you close the year
- Proceed to the edition of the obligatory accounting books: the daybook and the general ledger
- Proceed to the establishment of the accounting entries file.
4. Set up your accounting software
Once you have chosen your accounting software, you will be able to configure it according to the characteristics of your business and your accounting needs. To begin with, you must indicate all the information related to your company: tax system, legal form, closing and opening date of the accounting year, company name… Then, you will have to proceed to the parameterization of your accounting options. In particular, you will have to:
- Create the accounting journals that you need;
- Create a chart of accounts.
5. Carry out the actual accounting
Once you have set up your accounting application, you can get down to the business of keeping your accounts. You will have to record all your operations in the accounting system. At the end of the fiscal year, you will have to account for the inventory operations in their entirety to establish your balance sheet. You can proceed to the edition of your annual accounts as soon as you have recorded all the inventory transactions.
Sound off in the comments section below and tell us what you want to read next and if you want to read more about a sole proprietorship and accounts.