How to set up a business accounting system?


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Developing a accounting system with food financial policies and procedures is critical for a business to operate efficiently and successfully. One of the reasons businesses fail is where they don't keep proper records and information about their business.

A business accounting system will help to prepare financial statements. Financial statements produced regularly and correctly give key information to continually improve your business.

This presentation will help you to set up a business accounting system that will help you to manage the business effectively.

Published in: Business, Economy & Finance
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How to set up a business accounting system?

  1. 1. HOW TO SET UP BUSINESS ACCOUNTING SYSTEM One of the main reasons businesses fail is because there isn't a good bookkeeping system in place
  2. 2. Steps to set up business record keeping system  Ensure accounting system meet compliance requirements  Develop a financial procedures and processes  Set up transaction classifications (Chart of accounts)  Ensure process are in place to collect and record information
  3. 3. Develop procedures and processes Segregation of duties Separating duties to prevent fraud or error by one person Approval and authorisation Who are allowed to authorise various activities within the business? Customers and suppliers How to choose and manage them?
  4. 4. Develop procedures and processes Risk management Insurance, Quality control etc. Debt collection Credit control policies and procedures Employees and payroll Hiring policies, payroll management
  5. 5. Accounting cycle Collect data Journal Genera l ledger Adjust Trial balanc e Financi al stateme nt Accounti ng cycle
  6. 6. How to set up Chart of Accounts? The chart of accounts is very important to the overall effectiveness and accuracy of your bookkeeping.  Define the various accounts to be used in business  Assets – Cash, debtors, inventory, equipment, investments  Liabilities – Creditors, tax payable, loans,  Income – Sales, interest income, dividends  Expenses – Salaries, rent, marketing, advertising  Allocate a numbering system  To expand the level of information use tracking categories (cost centres, location)  Discuss with professional bookkeeper
  7. 7. Collect, organise, store and analyse FinancialRecords • Any transaction that has a financial element: • Invoices, receipts, delivery note for good and services you provide • Invoices for goods and services purchased and bills paid • Payment to employees • Payment to agencies like ATO, ASIC • Bank statements, end of year stock take records etc. NonFinancial Records • Contracts with suppliers and customers, lease agreements, insurance policies • Licences and permits • Employee records, such as time sheets, leave records, pay slips, employment contracts • Records which are business related and required by the law e.g..: Work Health and Safety • Information regarding customers and suppliers