Why Bookkeeping is important for all business?
Just like to prepare a report, you need a source of data, bookkeeping is a source that gets summarized into the financial statements or any other accounting report that you see. With bookkeeping tracks and records all the financial transactions, it becomes the starting point of accounting. No bookkeeping = No accounting.
Thus, it becomes important for businesses, small or big to have bookkeeping in place.
The following are the importance of bookkeeping:
- Bookkeeping helps to keep track of receipts, payments. Sales, purchases and record of every other transaction made from the business.
- It helps to summarize the income, expenditure and other ledger records periodically.
- It provides information to create financial reports which tells us specific information about the business as how much profits the business has made or how much the business is worth at a specific point of time.