Account books are the documents that contain a firm’s complete financial information, both from commercial and administrative operations.
A firm is able to maintain a favorable performance through the proper management of its bills. In our entry, The importance of having a correct business accounting, we outline the steps to be followed to maintain your bills in order.
According to the Commercial Code, every firm must maintain an ordered accounting to define the chronological order of the operations it conducts.
The importance of an account book is that it allows the register of all transactions and operations of a firm, it functions as a security before competent authorities, and it shows the debts and obligations of the firm as a legal entity.
Maintaining an account book up to date allows control of the status of the firm.
Account books are divided into two types:
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Obligatory books:
➲ Log book: All operations are registered, including transactions or activities carried out on a daily basis, following a chronological order. The content of this record may vary depending on whether other records or auxiliary registers are used as well.
➲ Inventory ledger and annual accounts: It includes a detailed and assessed relationship between the goods, rights, and obligations of the firm at a given time, such as the fiscal year-end.
To present the obligatory accounting records a four-month deadline is defined, starting on the day of the fiscal year-end.
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Voluntary books:
➲ Ledger: Keeps record of specific transactions of a ledger account, that is, its assets, liabilities, and their balance. This book shows the same information as the log book, but with more detail.
➲ Subsidiary ledgers: Include a detailed register of the values and information reflected on the main books. The conducted operations are recorded with more detail. These books may divide the accounting according to the necessities of register and control.
A written record of all the operations being carried out in a firm allows the compliance of the established provisions, such as accountability, as well as the avoidance of sanctions.
The methods to present the account books include:
➲ Bound books with numbered pages to avoid modifications.
➲ A CD or DVD with all information to be legalized.
In QuAdrans law and finance we aid you in the preparation of policies, subsidiaries and registration, register and update of account books.
