Starting a new business is all about the efficient use of budget. Ideas for the progress of the company usually keep igniting a bulb in your brain but what fades the light is the availability of funds or budget. From extending your business to another country or struggling with your business in a small town, whatever your business status may be right now bookkeeping and accounting are important to manage all the money work. Many businessmen even those with years of experience ignore accounting and bookkeeping. When dark clouds hover over their business, then they realize what big mistake they have done.

Let’s see why accounting and bookkeeping are so important for your business.

1. Helps to adjust budget: You are entirely dependent on your budget. It is utterly important to keep a check on your cash flow so that you can do well with your budget. Bookkeeping and counting help you have an idea about your budget. You are never blank when it comes to dreaming about something ahead. Accounting and bookkeeping keep you enlightened with your current bank balance.
2. Helps to file tax return easy: On an annual basis, every businessman has to go through piles of crumpled, folded and refolded receipts and transaction details. It is time to file for tax return. Your office desk resembles a mess because you can’t sort out all the details. Now what? Here bookkeeping and accounting come into play. At the time of filing, all you have to do is put forward your clean and disciplined record.
3. Helps to organize information: What, why, when, where and how. These are the questions every businessman must know about every deal signed and every contract celebrated. A businessman must not stay uninterested about his business. He must be organized enough to have everything in his hand. Accounting and bookkeeping give you an organized detail of everything.
4. Helps to analyze cash flow: Where did the money go? Where did the money come from? How much money was that? On a daily basis, every businessman has to regulate the cash flow from his bank account to someone else’s. Money is a sensitive issue. You are investing your efforts and energy solely for this. Therefore, keeping a track of it is important.
5. Helps to take profitable decisions: When you are aware of the cash flows and budget you are confident about your decisions. Your mind is clear from all confusions. You don’t have an ‘if’ or ‘but’ bothering you. In such cases, you make the most profitable decisions for your business.
6. Helps to learn from the past: Accounting and bookkeeping show you where you went wrong in the past. You have a clear cut detail of where you messed up. In case of any loss, the reason lies in front of you. For next time, you stay alert and well-planned. Bookkeeping minimizes the risk of mistakes.
7. Helps to figure out contracts with investors: Imagine you are approached by an investor or any other firm is willing to shake hands with you for a healthy partnership. In a meeting, they ask you about your previous performance. What will you present them? Of course, you will show them your bookkeeping and accounting records. In one go, they will go through your details. These records make connecting with investors and partners easy.
8. Helps to stay financially stable: Once you have the record in your hands you have everything in hands. You don’t spend too much nor you keep piling money up without knowing what can you do with them. You have a healthy approach to new ambitions while staying financially secure.
9. Helps to stay focused and peaceful: You are never frustrated. Your mind does not wander in hundreds of places to know how much money went where. You are relieved that all your records are with you and there is no doubt on any of your act. This gives you a peaceful state of mind.
10. Helps to shape a strong strategy: When you are moving forward in your business or establishing it in a new city or country, your moves are very well carved. Since you know how much budget you have already and how much more you have to spend on a new project your strategy comes in a good package.

Accounting and bookkeeping have been playing a significant role in making your business easier. It is unfortunate for us to give attention now because it has been there for thousands of years. The forms and existence kept changing for improvisation but the original concept stuck to the same notion; to keep the financial cash flow organized. In the earliest times, when there was no concept of screens and technology it was bookkeeping and accounting that manually kept matters sorted out. Even then, the businessmen and owners of properties were dependent on bookkeeping and accounting. Various proofs show us that bookkeeping and accounting is nothing new but an old gem.

History of Bookkeeping:

In various dictionaries of heritage colleges bookkeeping is defined as the profession of keeping an organized record of all transactions and other financial issues. Since ages, this system is being practiced in businesses, schools, non-profit organizations, and churches, etc. Archaeologists claim that they have found remains of some tracking records which date back to 8000 BC. In another search, a clay tablet was found which belongs to 4000 BC. These clay tablets are known to be used for noting down marriage dowries, wills, laws, and loans, etc. Luca Pacioli, a mathematician by profession and known as the Father of Modern Bookkeeping, wrote a book named “Everything about Arithmetic, Geometry, and Proportion”. In this book, he described the system of bookkeeping which is still practiced. Not only the procedure but also the tools of bookkeeping are explained by him in great details. Those tools are dubiously quite simple but those are the only things required by it; journals and ledgers. This book came out in 1494. That was the time when bookkeeping took a proper start for the world. By then, bookkeeping has never stopped. Every business, be it big or small, is using it efficiently.

History of Accounting:

Majority of the people mix these two terms with each other. However, there is a difference. And so there is a difference in tracking down their history. Accounting has been of essential value since forever. Most times use accounting as the chief source of confirmation about financial record and balance. Runs of accounting tracks are found in the ruins of Mesopotamia. Those records are claimed to be 7000 years old. Surprisingly, they used accounting to keep a record of their crop and herd growth. Even more surprising is the fact that the calculations they did to determine whether there was a shortage or surplus growth of the crop in the current year are still used in the present day. The trend of accounting moved towards advancement and got better in the later years. In the era of Roman Empire, Emperor Augustus used accounting to keep a record of revenues generated from public areas, crops and also the amount of money given as loans, charity as well as well construction purposes. In the middle ages, merchants got hands of an even better accounting system. They kept track of everything which showed them accurate statistics.