Book Keeping
what is book keeping?
Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business.Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation. There are several standard methods of bookkeeping, including the single-entry and double-entry bookkeeping systems. While these may be viewed as “real” bookkeeping, any process for recording financial transactions is a bookkeeping process
single-entry book keeping
Single-entry bookkeeping is an accounting system used to keep track of a business’s finances. There is one entry per transaction and most entries record either incoming or outgoing funds.
double-entry book keeping
Double-entry bookkeeping, in accounting, is a system of book keeping where every entry to an account requires a corresponding and opposite entry to a different account.
What We Have Here for You
We oversee a company’s financial data and compliance by maintaining accurate books on accounts payable and receivable, payroll, and daily financial entries and reconciliations.
Cash
It doesn’t get more basic than this. All your business transactions pass through the Cash account, which is so important that often bookkeepers actually use two journals, Cash Receipts and Cash Disbursements, to track the activity.
Accounts Receivable
If your company sells products or services and doesn’t collect payment immediately, you have “receivables,” or money due from customers. You must track Accounts Receivable and keep it up to date so that you send timely and accurate bills or invoices. Inventory. Unsold products are like money sitting on a shelf and must be carefully accounted for and tracked. The numbers in your books should be periodically tested by doing physical counts of inventory on hand.
Inventory
Unsold products are like money sitting on a shelf and must be carefully accounted for and tracked. The numbers in your books should be periodically tested by doing physical counts of inventory on hand.
Accounts Payable
No one likes to send money out of the business, but a clear view of everything via your Accounts Payable makes it a little less painful. Concise bookkeeping helps assure timely payments and avoid paying someone twice! Paying bills early can also qualify your business for discounts.
Loans Payable
If you’ve borrowed money to buy equipment, vehicles, furniture or other items for your business, this account tracks payments and due dates.
Sales
The Sales account tracks all incoming revenue from what you sell. Recording sales in a timely and accurate manner is critical to knowing where your business stands.
Payroll Expenses
For many businesses, payroll expenses can be the biggest cost of all. Keeping this account accurate and up to date is essential for meeting tax and other government reporting requirements. Shirking those responsibilities will put you in serious hot water.
Owners Equity
This account has a nice ring to it. Basically, it tracks the amount an owner (or owners) puts into the business. Also referred to as net assets, owners equity reflects the amount of money an owner has once liabilities are subtracted from assets.
Retained Earnings
The Retained Earnings account tracks any company profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total of money that has been retained since the company started. Managing this account doesn’t take a lot of time and is important to investors and lenders who want to track how the company has performed over time.
Is Your Bookkeeping Up to Scratch?
every business needs to be on the ball when it comes to their bookkeeping, no matter how big or small they are. If you’re not sure about where your small business bookkeeping can be improved, don’t worry. We’ve put together a checklist that will make sure you’re not forgetting anything when it comes to your bookkeeping.
Frequently Asked Questions
Some FAQ’s.
What is difference between accounting and bookkeeping?
Accounting is the process by where a company’s financials are recorded, summarized, analyzed, consulted and reported on. Bookkeeping is the recording part of this process, in which all of the financial transactions of the business (consisting of income and expenses) are entered into a database.
What is the process of bookkeeping?
The process of bookkeeping involves four basic steps: 1) analyzing financial transactions and assigning them to specific accounts; 2) writing original journal entries that credit and debit the appropriate accounts; 3) posting entries to ledger accounts; and 4) adjusting entries at the end of each accounting period.
What is the purpose of a bookkeeper?
The purpose of bookkeeping is to create a record of financial transactions that can be summarized for various uses. Bookkeeping systems range from the most basic, such as the check register used to record checks and deposits, to the complex systems of ledgers and journals used by large corporations.
What a bookkeeper should know?
Your bookkeeper must have a basic understanding of bookkeeping/accounting terms. They should have a basic understanding of the difference between the five basic types of accounts (assets, liabilities, equity, income and expenses). 2. They must be detail oriented.