Know what bookkeeping is and its importance for SMEs

You must be familiar with the term bookkeeping. What is bookkeeping and how important is it for MSMEs like you? You need to know that bookkeeping activities are very important not only for large companies, but also for MSMEs.

In addition to seeing the profit and loss of your business, there are many more important books for your business effort You. However, before looking at some of the other benefits of bookkeeping, let's first know what bookkeeping is.

What is Bookkeeping?

In simple terms, bookkeeping can be interpreted as the activity of recording the entry and exit of money. Bookkeeping activities are usually identical to the accounting field. That is why, in large companies, bookkeeping is generally done by accountants.

Bookkeeping is divided into three types, including the bookkeeping of cash records, inventory of goods, and inventory of goods.

Among the three types of bookkeeping, only two are commonly carried out by MSMEs, namely the bookkeeping of cash records and inventory or stock of goods (if the type of business is selling goods).

Generally, MSME activists do the bookkeeping by recording it in a book. However, with the proliferation of digitalization, now there are many applications that help users, including MSMEs, to do bookkeeping easily.

You can easily record transactions, record accounts payable, and record stock of goods with just the diapplication smartphone You. Some of the well-known bookkeeping applications include: Cash book and BookStore.

The Importance of Bookkeeping for MSMEs

Bookkeeping is very important for all types of businesses, including MSMEs. Why so? The following are the benefits that you will get if you do bookkeeping.

Knowing Business Financial Condition

The benefits of the first bookkeeping are as mentioned above. As a business financial record, bookkeeping certainly makes it easier for you to know the financial condition of your business. Are you in a profit or loss condition? Without bookkeeping, you will find it difficult to know this.

Anticipating Losses

By looking at daily financial records in the books, you can minimize potential losses. How to? For example, you can reduce the number of purchases of raw materials or stock of goods if the income is low.

As Transaction History Document

Not only to see financial conditions and minimize potential losses, bookkeeping is also useful as a document for storing transaction history. If you routinely do bookkeeping, you can easily view the history of purchases, sales, and payables and receivables every day.

As an Assessment Tool

Assessing your business is very important to do. Why is it important? This is to see if your business is going in a better direction or not. One of the assessment tools that can be used to measure it is your business bookkeeping.

By looking at the transaction history every day, you can assess whether there is an increase in sales or not.

After knowing what bookkeeping is and the importance of bookkeeping for MSMEs above, are you interested in starting your business bookkeeping? If you are lazy to do your bookkeeping manually, you can use bookkeeping applications that you can download at www Play Storeand App Store to make it easier for you. Because this is also the right time for MSMEs go digital.