Introduction to Bookkeeping

Bookkeeping

Bookkeeping is the recording of daily financial transactions, and is normally a part of the overall process of accounting in most businesses and organizations. It involves preparation of resource documents for day-to-day activities, operations, financial transactions, tax payments, and many other affairs of an organization. The term “bookkeeping” is from the Latin word “books,” which means accounts. This process is very useful for recording financial information. It is used to record purchases, sales, receipts, payments, loans, and any other type of financial activity.

There are various types of bookkeeping records such as income, gain, loss, balance, statement, work, and financial records. There are different techniques for recording transactions such as manual recording, automatic recording, ledgers, journals, computerized ledgers, micro-station, bar code, and voice-recognition journal. The type of technology used may vary but the records must be systematically stored and properly maintained. Most modern systems are highly complex and time consuming. It is important to use experienced bookkeepers who know the system thoroughly and can complete the tasks efficiently within set time limit.

public accounting

A bookkeeper is an expert who not only keeps track of financial transactions but also prepares reports of previous days’ transactions. Generally, bookkeepers are required to prepare reports for managers, owners, investors, tax authorities, creditors, and lawyers. They perform clerical and administrative tasks. Bookkeepers must ensure that the financial statements are accurate, up-to-date, free of errors, and easily readable. The entire transaction process must be documented in a systematic and logical manner.

Introduction to Bookkeeping

Bookkeeping involves utilizing several techniques for recording financial transactions such as single-entry bookkeeping system, double-entry bookkeeping system, work sheet system, bar code, credit transaction system, asset manager, invoice system, and financial statement system. Double-entry bookkeeping system uses a system of double entry which includes debit and credit. Single-entry bookkeeping system uses only one account while work sheet system uses many accounts at the same time to give an overview of the business’s cash flows. Bar code system helps to identify all the products or services during the day from a single card.

As an employee bookkeeper, you must follow the company’s policy for dress code. Some companies assign to each bookkeeper a specific area of bookkeeping duties. Generally, bookkeepers are trained to handle the financial records personally, but in most cases they are given reports by their supervisors. If any wrong information is recorded, it is the responsibility of the concerned department to rectify the same. However, the use of computerized daily transactions records makes bookkeeping less complicated, less time-consuming, and more accurate.

Today, nearly every business organization utilizes some kind of bookkeeping system to record its financial transactions. With the advent of online accounting systems, bookkeeping has become less cumbersome than it was earlier. Now bookkeepers record the financial transactions of the company on their personal computers, allowing them to input the data directly into the financial statements. Companies can save a lot of money on salaries by reducing the number of individual financials bookkeepers. Hiring one professional bookkeeper costs only about $40 per month and allows the company to save a lot of money in salaries.