Record Keeping Systems
RECORD KEEPING SYSTEMS
Businesses handle financial records in various ways. A small-business owner can keep the records personally or employ a full-time or part-time bookkeeper or accountant. Larger businesses establish an accounting department or use an accounting service organization. The record-keeping system a business adopts determines, in part, the way it will handle its records. Systems for keeping financial records may be simple or complex, and they may require almost no financial knowledge to use or may be highly technical. Today almost all business records systems are computerized. Regardless of the type of record system a company selects, the system must be accurate, keep information safe and secure, and provide timely and accurate information.
• SMALL-SCALE RECORD SYSTEMS Manual record systems in which all information was entered and analyzed by hand were used by businesses for thousands of years. If you have taken an accounting class, you have probably had experience with a manual records system. Few businesses other than some that are very small rely on manual systems today. Easy-to-use and affordable accounting software that runs on personal computers has replaced most manual systems. However, standardized accounting forms and records systems for manual recordkeeping can be obtained at office supply stores. Many small firms rely primarily on their cash register to gather most of the information needed for their financial records. In addition to printing receipts for customers, cash registers maintain printed tapes of the details of each sales transaction. This information can be used to enter data into the business’s accounting records. However, cash registers record only information on customer sales, which is an incomplete record of the financial transactions of the business. Records also have to be maintained of all purchases and payments as well as any income received that is not recorded in the cash register.
• LARGE-SCALE RECORD
Businesses handle financial records in various ways. A small-business owner can keep the records personally or employ a full-time or part-time bookkeeper or accountant. Larger businesses establish an accounting department or use an accounting service organization. The record-keeping system a business adopts determines, in part, the way it will handle its records. Systems for keeping financial records may be simple or complex, and they may require almost no financial knowledge to use or may be highly technical. Today almost all business records systems are computerized. Regardless of the type of record system a company selects, the system must be accurate, keep information safe and secure, and provide timely and accurate information.
• SMALL-SCALE RECORD SYSTEMS Manual record systems in which all information was entered and analyzed by hand were used by businesses for thousands of years. If you have taken an accounting class, you have probably had experience with a manual records system. Few businesses other than some that are very small rely on manual systems today. Easy-to-use and affordable accounting software that runs on personal computers has replaced most manual systems. However, standardized accounting forms and records systems for manual recordkeeping can be obtained at office supply stores. Many small firms rely primarily on their cash register to gather most of the information needed for their financial records. In addition to printing receipts for customers, cash registers maintain printed tapes of the details of each sales transaction. This information can be used to enter data into the business’s accounting records. However, cash registers record only information on customer sales, which is an incomplete record of the financial transactions of the business. Records also have to be maintained of all purchases and payments as well as any income received that is not recorded in the cash register.
• LARGE-SCALE RECORD