Converting Your Manual Bookkeeping free essay sample

If youre converting a manual bookkeeping system to a computerized system, your conversion will take a bit more time than just starting fresh because you need to be sure your new system starts with information that matches your current books. The process for entering your initial data varies depending on the software youve chosen. To ensure that you properly convert your bookkeeping system, use the information that comes with your software; read through the manual, review the startup suggestions made as you set up the system, and pick the methods that best match your style of operating.The best time to convert is at the end of an accounting period. That way, you wont have to do a lot of extra work adding transactions that already occurred during a period. For example, if you decide to computerize your accounting system on March 15, youd have to add all the transactions that occurred between March 1 and March 15 into your new system. We will write a custom essay sample on Converting Your Manual Bookkeeping or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Its just easier to wait until April 1 to get started even if you buy the software on March 15.While you can convert to a computerized accounting system at the end of a month, your best time to do it is at the end of a calendar or fiscal year. Otherwise, you have to input data for all the months of the year that have passed. Whenever you decide to start your computerized bookkeeping, use the data from your trial balance that you used to close the books at the end of most recent accounting period. In the computerized system, enter the balances for each of the accounts in your trial balance.Asset, liability, and equity accounts should have carry-over balances, but Income and Expense accounts should have zero balances. Of course, if youre starting a new business, you wont have a previous trial balance. Then you just enter any balances you might have in your cash accounts, any assets your business may own as it starts up, and any liabilities that your business may already owe relating to startup expenses. You also add any contributions from owners that were made to get the business started in the Equity accounts.After you enter all the appropriate data, run a series of financial reports, such as an income statement and balance sheet, to be sure the data is entered and formatted the way you like it. Its a lot easier to change formatting when the system isnt chock-full of data. You need to be sure that youve entered the right numbers, so verify that the new accounting systems financial reports match what you created manually. If the numbers are different, nows the time to figure out why.Otherwise the reports you do at the end of the accounting period will be wrong. If the numbers dont match, dont assume the only place an error could be is in the data entered. You may find that the error is in the reports you developed manually. Of course, check your entries first, but if the income statement and balance sheet still dont look right, double-check your trial balances as well. Read more: http://www. dummies. com/how-to/content/converting-your-manual-bookkeeping-to-a-computeriz. html#ixzz1SMwAbn8q