For Small Business Accounts Read Bookkeeping Spreadsheets

There is a major difference between sophisticated accounting software used by larger businesses for financial control purposes than is required for small business where a simple bookkeeping spreadsheet is sufficient.

An accountant needs to not only ensure the financial records are accurate but also retrieve any part of the accounting records to answer accounting questions on the accounts, provide a legal basis for the transactions and report the financial statements at regular periodic intervals.

Accounting is a term that embodies a whole raft of financial activities while bookkeeping is specifically literally the keeping of books of account. For non limited companies that do not need to produce a balance sheet then a simple income and expenditure account can be produced much simpler using single entry bookkeeping principles.

Less financial control is often required from small business accounting software as the bookkeeper is often the owner manager who already has an intimate knowledge of each transaction. Books are still required for tax purposes and a solid requirement of preparing a set of financial books for tax purposes is that each entry is supported by third party evidence.

The prime accounting documents providing back up are sales and purchase invoices or receipts and bank statements. Financial transactions where no receipt exists can still be entered in the business books although all transactions not carrying third party evidence could subsequently be disallowed for tax purposes and certainly would be if the amounts entered indicated unusual income or expenditure.

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