Bookkeeping is a process in which the financial records of a business are
kept well organized and up-to-date. This whole process entails various
different activities performed by the business owners or bookkeepers such
as recording the financial transaction, maintaining the complete records
of the sales, purchases and the payments made or received. Bookkeeping
enables business owners to take important business decisions
understanding the profit margins and debts that the company owes.
Various Bookkeeping Duties
When asked "what is bookkeeping?" I say that the integral component of
the bookkeeping operations is to organize the cash flow on a regular
basis. It is not that always professionals are required for bookkeeping
and as far as small businesses are concerned, it can be done by the
business owner also. As per the various bookkeeping duties, there are
different titles given to bookkeepers such as auditing clerks, billing
clerks, financial clerks, payroll clerks and accountants.
What is Bookkeeping Systems
There are two bookkeeping systems on the basis of which bookkeeping
operations are carried out; namely single entry system and double entry
system. In the single entry system, expense accounts and revenues are
required to maintain the financial transactions. This single entry system
is suitable for small businesses as in them the daily financial
transactions are quite less than the big ones.
In a double entry system, the ledgers, the balance sheets, debits,
credits and the tax payments are maintained. In a double entry system,
there are primarily 2 phases, in the first one the records are maintained
and in the second one, the errors present in the financial documents are
Types of Books Used In Bookkeeping
The bookkeeping operations include maintaining financial records in more
than one format. There are basically 3 types of books that are included
in the bookkeeping operations namely daybooks, journals and ledgers.
In the daybooks, detailed financial statements are recorded on a daily
basis. The information stored in the journals is such that is not
included in daybooks as there are many small businesses that do not
maintain daybooks. Ledgers are basically books that contain the total
finances in the form of credits, debits, sales, purchases and cash
What Is Computerized Bookkeeping?
Computerized bookkeeping is one in which the financial transactions and
other financial details are maintained in computers. The speed of
performing calculations is fast in computerized bookkeeping as compared
to the traditional one. The big business houses that have lot many
financial records to be maintained can opt for this computerized
bookkeeping as it would save a fair amount of time.
All the business owners who think that bookkeeping is not necessary for
their business have to understand that it would save that time which they
are presently investing in preparing the tax reports, calculating the
credits and managing the balance sheets. Bookkeeping is one such thing
with the help of which a business owner would know at the month end,
where the finances were utilized and from where the payments are expected
in the future.
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