CPAs in Davao Unite in Servicing Businesses to Retain their Financial Productivity
Bookkeeping services are very important in maintaining business records and keeping track of daily transactions to ensure that all business obligations are met, bills are paid, and to avoid future conflicts. Whether it’s a small organization or a large corporation, bookkeeping is really an asset in keeping accurate financial records.
The Importance of Basic Bookkeeping for Businesses in Davao City
Bookkeeping is one task that businesses shouldn’t overlook or neglect. Almost always, the sole reason why a lot of businesses do not survive for more than a year is because of poor financial management. Having no CPA or bookkeeper to properly keep a record of your business transactions can cripple the growth of your company. And whether you run a small organization or you’re an owner of a large corporation, bookkeeping is important.
Here is a list of what a bookkeeping can do for you and your business.
- It keeps track of your cash flow.
- It is essential to avoid any mistrust or doubt among company owners and staff.
- It allows you to determine and minimize tax liabilities.
- It allows you to see whether or not your business is making a profit.
- It allows you to see your company’s financial position or standing.
It can provide you a greater understanding of which area of the business profits and which are not, so you can trim down operational costs.
Many business owners often give bookkeeping the lowest priority because they don’t recognize its importance. What happened next? They probably lost more money than it would if they had hired somebody to do the job.
In today’s tough economic climate, if you really intend to make your Davao based business survive and grow, proper keeping of the books is very essential. If you do not have bookkeeping expertise, you can always hire a CPA in Davao City to handle all your financial records and statements.
The Methods of Bookkeeping: A Comparison
Though we are now in a computer-generated era, it doesn’t always make sense to use a computerized bookkeeping system. If you are running a small business in Davao City, a CPA can manually do bookkeeping.
Manual bookkeeping is the traditional way of bookkeeping wherein business transactions are recorded manually. By manual means, using pen and ink in journal books and ledgers which typically include sales and purchase day books, cash book, and petty cash sheets . As mentioned previously, this method is still used in many small businesses with less complicated or minimal transactions.
Computerized Bookkeeping on the other hand is the new and innovative way of recording business transactions. With it, bookkeeping has been made a lot easier and faster, eliminating the tedious task of manual bookkeeping.
Simply put, manual bookkeeping is ideal for those who aren’t techy and confident using a computer. It is also ideal for small business owners who have simple business affairs. While computerized are for the techy ones and those that run large businesses or corporations.
Now, let’s look into the details of the advantages and disadvantages of these two bookkeeping methods and see what is best for your business in the city.
Manual Bookkeeping: It’s Advantages and Disadvantages
This is the computer age. Why would you not have a computerized system? Although, it may not the norm today, for a non – techy, manual bookkeeping is advantageous to them.
Below is the list of advantages and disadvantages of manual bookkeeping.
Advantages
- Easy to Use – If you are learning to do the bookkeeping for the first time, doing it manually can help you learn the process faster. Moreover, with manual bookkeeping, it’s easier to correct mistaken entries by simply erasing it and replacing with the correct one.
- Cost Saving – Bookkeeping software can be very expensive. So if you’re just starting a business, it’s better to use manual bookkeeping system to save a considerable amount of money.
- Less Data Corruption – In computerized system, there are cases where data are being lost and corrupted. Whereas it doesn’t really happen when you use manual books so you don’t have to worry about software crashes and computer glitches.
Disadvantages
- More Tedious – The problem with the manual bookkeeping system is that the recording process is more tedious. Your company CPA have to physically write in the numbers. And if he or she wants to cross check your work, he or she must go through the manual books and ledgers one by one to check errors.
- More Time Consuming – One of the disadvantages of manual bookkeeping is the time spent into it. Because you don’t have a computer with built-in bookkeeping features, you have to do it yourself which usually takes more time.
Computerized Bookkeeping System: The Advantages and Disadvantages
Today, more and more businesses are turning to computerized bookkeeping systems. It’s no wonder why. It has several distinct advantages over the manual bookkeeping method. However, it has also its own disadvantages which should not be overlooked.
Advantages
- Accuracy – Mathematical errors could sometimes be made by manual bookkeeping even with CPAs. By using an automated and computerized system, we can ensure a more accurate and efficient inputs of data. It has built-in error checking and reporting features that prohibits users entering incorrect data or transactions and preventing them from making basic errors.
- Speed – It computes and run reports much faster than manual bookkeeping system. It can also produce more timely information. Since it computes in less time, it saves time.
- Convenience – If you want to view the financial books, you don’t have to dig for hours and flip each page. With a computerized system, it’s just a few clicks of a mouse.
Disadvantages
- Danger of Computer Fraud – If the proper level of control and security are not properly being instituted, danger begins. Beware of malicious and dangerous spywares and give access only to the authorized people.
- Power Failure – Since computers are electronic, it depends solely on electricity to function. In cases of power failure, no work can be done. And if the user failed to save all the data entered, there is no way it can be retrieved.
- Involves Technical Training – When you get a new bookkeeping system, you need to spend time training people who will be involved in it since there are about new versions released every year. For some bookkeepers or CPAs, they often need more time to be able to learn the new system.
- More Expensive – Bookkeeping softwares changes almost every year and there may be new versions to purchase. This makes it more expensive than manual books. Moreover, if the computer is broken, you need to pay for its repair.
Bookkeeping is really critical in every business. Whether you choose to stay with the traditional way of keeping records or opt to use the computerized system, bookkeeping should not be neglected. Should you wish you to employ a Davao CPA in your company or outsource your bookkeeping activities to the professionals, you can just check out Davao accounting