As a business owner, it’s crucial to keep accurate and up-to-date records of your financial transactions. With advances in technology, more and more businesses are moving towards electronic record-keeping for their books of accounts. We’ll explore the benefits of maintaining your books of accounts electronically and how to do it effectively.
What are Electronic Books of Accounts?
Electronic books of accounts, also known as e-books or digital books, refer to financial records that are maintained in electronic format. This means that instead of keeping physical records of your maintenance of electronic books, such as receipts, invoices, and bank statements, you store them electronically using accounting software or other digital tools.
Benefits of Electronic Books of Accounts
There are several benefits to maintaining your books of accounts electronically, including:
1.Improved Accuracy
Electronic books of accounts are generally more accurate than manual record-keeping. By automating many of the tasks associated with record-keeping, such as data entry and reconciliation, you reduce the risk of errors and discrepancies in your financial records.
2.Time-Saving
Electronic books of accounts can save you time by automating many of the tasks associated with record-keeping. For example, you can set up automatic bank feeds to import transactions directly into your accounting software, eliminating the need for manual data entry.
3.Easy Access
With electronic books of accounts, you can access your financial records from anywhere, at any time. This allows you to monitor your financial performance and make informed decisions about your business, even when you’re on the go.
4.Cost-Effective
Electronic books of accounts can be cost-effective compared to manual record-keeping. By eliminating the need for paper-based records, you can reduce printing and storage costs, as well as the time and resources required to maintain physical records.
5.Compliance
Maintaining your books of accounts electronically can help you comply with regulatory requirements. Many countries require businesses to maintain electronic books of accounts for tax and other purposes, and using accounting software can make it easier to meet these requirements.
How to Maintain Electronic Books of Accounts
To maintain your books of accounts electronically, you’ll need to follow these steps:
1.Choose Accounting Software
The first step is to choose digital accounting that suits your business needs. There are many options available, ranging from basic tools for small businesses to more advanced solutions for larger enterprises.
2.Set up Chart of Accounts
Once you’ve chosen your accounting software, set up a chart of accounts that reflects your business’s financial structure. This includes creating accounts for assets, liabilities, equity, income, and expenses.
3.Import Data
Import your financial data into your accounting software. This includes bank statements, invoices, receipts, and other financial documents.
4.Record Transactions
Record your financial transactions in your accounting software. This includes entering invoices, recording payments, and reconciling bank accounts.
5.Generate Reports
Use your accounting software to generate financial reports, such as profit and loss statements, balance sheets, and cash flow statements. These reports will provide you with insights into your business’s financial performance and help you make informed decisions about your finances.
In conclusion, maintaining your books of accounts electronically can help you save time, reduce costs, and improve the accuracy of your financial records. By choosing the right accounting software, setting up a chart of accounts, importing data, recording transactions, and generating reports, you can maintain your electronic books of accounts effectively and comply with regulatory requirements. If you’re not already maintaining your books of accounts electronically, it’s worth considering the benefits that this approach can offer to your business.
Originally published by: Benefits and Maintenance of Electronic Books of Accounts
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Accounting in Odoo 12: An Overview
Accounting involves maintaining ledgers, recording assets, and counting liabilities to determine the economic position of a company. To enable businesses in keeping a record of their financial transactions Odoo launches its accounting software version 12. Odoo 12 accounting version enables businesses to record transactions; create, send, and reconcile invoices; process payments; and audit statements.
Let’s explore some of the core features of Odoo 12 Accounting software.
Features of Odoo 12 Accounting
1. Odoo 12 automatically creates an additional entry of every transaction including customer invoices, inventory movement expenses, the point of sales, etc.
2. Supports accrual and cash basis methods through which businesses can report any income/expense at the time of transaction.
3. Robust software to support and manage multiple companies.
4. The multi-currency support feature enables businesses to make transactions in other countries.
5. Facilitates organizations to create real-time financial reports, management reports, performance reports, cash reports and more
6. Speeds up the bank reconciliation process and makes the task of importing bank statements directly from your bank to the Odoo account easier.
7. Enables businesses to conduct both manual and automatic inventory valuations.
8. Automatically calculates current year earnings to eliminate year-end journal and rollovers.
9. Odoo 12 has simplified the process of matching credit and debits by linking journal entries.
Different Types of Payment Workflows and invoices
Odoo 12 accounting software supports different types of payment workflows and invoicing. Let’s explore some:
Invoice Creation: Businesses can manually create sales orders, purchase orders, etc. with invoicing or sales app. It also facilitates businesses in splitting a payment into multiple invoices or an invoice into multiple payments.
Open invoices: An invoice includes information like price, quantity, dates, parties involved, tax details, etc. Once an invoice is ready, it gets validated and the status changes to an open invoice. A detailed invoice can be sent to the customer via email for validation.
Reconciliation: Odoo 12 makes it easier for businesses to reconcile their invoices with banks or other systems. Businesses just have to integrate their banks with Odoo 12 to automate reconciliation.
Payment follow up: Tracking the payment and keeping a regular follow up is essential to avoid overdue. In the case of any overdue or other payment-related issues, businesses can take necessary actions using Odoo 12 accounting.
Customer aging report: The customer aging report is used to check whether there are issues in the plan or customer credit.
Profit and loss: The businesses can access revenue and expense reports from the profit and loss statements. It gives a clear idea about the present financial/accounting scenario.
Balance sheet: The companies can access all the information regarding liabilities, assets, and equity from the balance sheet.
Latest Additions and Changes in Odoo 12 Accounting
The purpose of Odoo 12 accounting software is to micro-manage every financial activity including accounts receivable, accounts payable, bank balances, etc. It includes various modules to facilitate double-entry bookkeeping, multi-currency support, inventory valuations and more. Several new additions and changes have been made in Odoo 12 to ensure the smooth running of businesses to enhance customer experiences.
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