Sub: Finance Topic: Handling Financial Data
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Record Keeping Systems
Businesses handle financial records in various ways. A small-business owner can keep the recordspersonally or employ a full-time or part-time bookkeeper or accountant. Larger businesses establishan accounting department or use an accounting service organization. The
abusiness adopts determines, in part, the way it will handle its records. Systems for keeping financialrecords may be simple or complex, and they may require almost no financial knowledge to use or maybe highly technical. Today almost all business records systems are computerized. Regardless of thetype of record system a company selects, the system must be accurate, keep information safe andsecure, and provide timely and accurate information.
SMALL-SCALE RECORD SYSTEMS
Manual record systems in which all information was enteredand analyzed by hand were used by businesses for thousands of years. If you have taken anaccounting class, you have probably had experience with a manual records system. Fewbusinesses other than some that are very small rely on manual systems today. Easy-to-use andaffordable accounting software that runs on personal computers has replaced most manualsystems. However, standardized accounting forms and records systems for manualrecordkeeping can be obtained at office supply stores. Many small firms rely primarily on theircash register to gather most of the information needed for their financial records. In additionto 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 anincomplete record of the financial transactions of the business. Records also have to bemaintained of all purchases and payments as well as any income received that is not recordedin the cash register.