9. Record keeping
•It is a primary stage in accounting that entails
keeping a record of monetary business
transactions, knowing the correct picture of
assets-liabilities, profits, loss, etc. In addition, it
assists in maintaining control of the expenses to
minimize the expenditure and have important
information for legal and tax purposes. In other
words, a recordkeeping system is the
backbone of any company’s financial structure.
10. •One of the first things any
new business must decide
on is how its records will
be kept. Accurate record
keeping is a key to many
aspects of your business's
success -- from assessing
your operation's profit
margins to ensuring that
you're in compliance with
IRS tax rules.
11. There are two methods
in which business records
can be kept:
1. manual record keeping
2. computerized (or
automated) record
keeping.
12. Manual Record Keeping System
•Operators of smaller business ventures often opt
for a manual record-keeping system. For a
particularly part-timers and business owners
who have just opened their doors -- the pencil
and paper method is adequate. Some
businesses grow out of the manual system, but
others may find that the manual system works
just fine for the long run, too
13. Manual Record Keeping System
•Manual records satisfy the tax code as long
as they are accurate and can be understood
or explained if questioned. Of course, if you
decide to use a manual system, you must
learn how to use it.
14. There are a few traditional ways to
manually keep small business records.
•Preformatted record books. Inexpensive,
preformatted record books are available at
most office supply stores.
•Ledger sheets. Ledger sheets (also available
at office supply stores) are columnar pads of
paper, usually light green in color.
17. •Either way, you must keep a
record of each expense --
jotting down a brief
description of the business
expense, the date incurred,
the amount, and to whom it
was paid. On the profit side
of the equation, you must
also keep similar records of
any income your business
receives.
•
18. Pros of Manual Record Keeping
•low cost (ledger pads and books)
•ease of use (the manual system is pretty
painless, especially if you don't have lots of
different expense and income items).
19. Cons of Manual Record Keeping
•They are often "single entry" systems, meaning
you enter each transaction only once. As such,
there is no automatic check and balance system
like that used in computer programs (like Quicken
or in more formal double entry bookkeeping
systems.
•You must manually tally up expenses or income by
category or by month -- which can be time
consuming.
20. Computerized Record Keeping
Keeping your business's records on a computer
follows the same principles as a manual system,
except the computer automates the process so it's
faster and more accurate. A simple-to-use software
program like Quicken (Intuit) or MS
Money (Microsoft) eliminates the need for a
handwritten set of books. You input each
transaction (whether expense or income) into the
software program and assign a category to each --
whether a descriptive word like "advertising" or a
number code such as "201."
21. Pros of Using a Software Program
•eliminate math errors
•instantly see your income and expenses by
category
•get profit and loss statements and other financial
summaries quickly, and
•interface with compatible tax software programs -
- so you don't need to re-input data come tax
time.
22. Cons of Using a Software Program
•They are slightly more expensive than manual
record keeping supplies. A simple program
like Quicken runs about $50, while programs
(like Quickbooks) that are geared toward larger
businesses can cost $150 or more.
•You must have a computer and be comfortable
using it on a regular basis.
23. Keeping Source Documents
•Regardless of how you keep your business's
records, you must still hold onto what
accountants call "source" documents. These
are the receipts, bank statements, purchase
invoices, and other records that back up the
numbers that get entered into your record-
keeping system.
24. Should You Hire a Bookkeeper?
•Most new businesses don't have the money to hire
bookkeeper, This makes it more important for business owners
to choose a record-keeping system that they're comfortable
with.
•But what if you can afford to hire a bookkeeper? Does this
mean that you don't need to worry about the ins and outs of
different record-keeping systems? In a word, no. Tax law places
responsibility for most bookkeeping and accounting errors
squarely on the business owner. So, even if you've hired a
bookkeeper to handle your business's books on a day-to-day
basis, it is still essential that you have a good grasp of general
bookkeeping concepts and an awareness of what's going on
with your business's record-keeping practices.
25. Experiential Learning:
•Plan and execute a small-scale
tourism event, such as a guided tour
or cultural showcase. Document the
process, including record-keeping
practices, and present your findings
to the class.
26. Activity 1: Creating an Itinerary
•Teaching Strategy:
Project-Based Learning
•Materials:
Travel brochures, computers with internet access
•Significance:
Students will create a detailed itinerary for a
tourist visiting a specific destination, incorporating
record-keeping practices.
27. Instructions:
•1) Research a popular tourist destination and
gather information on attractions,
accommodations, transportation, and other
relevant details.
•2) Create an itinerary using a template or design
your own, including time slots, activities, and
necessary information.
•3) Present your itinerary to the class and explain
the record-keeping practices used.
28. Rubric:
•- Completeness and accuracy of itinerary 5
•- Organization and presentation - 5
Incorporation of record-keeping practices
(10 pts)
31. Quiz
1-2 What are the 2 methods use in record
keeping?
3-4 Give the 2 traditional ways to manually
keep small business records.
5-6 pros of using manual record keeping
7-8 cons of using manual record keeping
9-10 Pros of Using a Software Program
