Businesses generally make extensive use of spreadsheets
both in accounting and all other business fields. Being a
numerically based system of analysing information
spreadsheets are used throughout every accounting function
as the technique presents an ideal basis to maintain
accuracy and automate the collection of financial
information.
Every small business needs to keep records of sales
invoices and income received and purchase invoices in
respect of expenses. It is not sufficient for accounting
and taxation purposes for these receipts and payments to be
left in the office or the back of a van in a carrier bag.
At some stage these prime bookkeeping documents need to be
processed.
Processing the financial documents related to a business
enterprise basically means they need to be listed. For
taxation and financial control purposes the invoices also
need to be added up and analysed. The most basic method
would be to simply make a list of the sales income and a
second list of the purchase expenses.
Using a manual method of listing the information falls
short of the analysis required and is more time consuming
that using a little technology to both ensure the summation
is accurate and the analysis simplified. Listing the sales
and expenses of a small business on spreadsheets is no more
difficult then a manual paper system and has tremendous
advantages in automating and ensuring accuracy.
Hence the use of bookkeeping spreadsheets to prepare the
accounting information required. Instead of listing the
items on a paper list the items can be just as easily
listed on a spreadsheet which will add up the items as
required without the requirement to double check the adding
up is accurate. Such a list has a history in accounting
term as a sales daybook and a purchase daybook
To achieve the required analysis of sales and purchases
all that is required is to write into the top of each of
the spreadsheet columns the titles of the analysis headings
required. Then repeat the value of each transaction in the
total column into the analysis columns. Use the spreadsheet
technology to add up each column and you have an effective
bookkeeping spreadsheet.
Preparing such a bookkeeping spreadsheet might and often
does suffice the needs of the smallest business enterprise
and is a close step towards achieving a valuable tool for
this purpose, bookkeeping software. Bookkeeping software
can be as simple as a home produced spreadsheet but with
additional facets that can have significant financial
benefits to the business.
Bookkeeping software produced on spreadsheets would
normally be a series of spreadsheets with the columns
preset and titled and formulae written into the sheet to
automatically add up each column. In addition the columns
used would normally be restricted to general headings to
include a full analysis of all items.
Small businesses that might produce their own spreadsheet
would often do this on an annual basis. Bookkeeping
software is much more likely to provide these bookkeeping
spreadsheet templates on a monthly basis to enable a degree
of financial control to be exercised by the small business.
That is the second real value of bookkeeping spreadsheets,
the ability to provide the business with financial
information and through that data financial control over
the business activities. The first value is of course the
simplicity of listing with automated summation of the
figures.
Small businesses can also benefit from professionally
produced bookkeeping spreadsheets that have been
specifically arranged not just to produce a list of income
and expenses but also in a way that analyses that
information in the way the small business requires it.
There are two main requirements of the way the financial
records are analysed being to produce a financial profit
and loss account for the business on a periodic basis but
also to provide the totals of the categories required for
taxation purposes.
Buying a piece of bookkeeping software written on
spreadsheets can thus become an essential tool for the
business. The essential element being to both make the
accounting simple and easy as listing items, automated
analysis and summation assisting the financial control and
improved financial performance while also producing the
benefits of being analysed to make the completion of annual
tax return forms easier.
Everyone in business wants to make a profit making
financial control important. Everyone in business has to
fill in tax forms and submit accounts in the tax authority
format. Bookkeeping spreadsheets provide an essential
accounting tool for every business to achieve these
objectives.
----------------------------------------------------
Terry Cartwright a qualified accountant at DIY Accounting
in the UK designs accounting software for limited companies
at http://www.diyaccounting.co.uk/companyaccounts.htm on
excel spreadsheets and self employed bookkeeping software
http://www.diyaccounting.co.uk/bookkeeping.htm
No comments:
Post a Comment