What is bookkeeping?
What is bookkeeping? There are many misunderstandings of what bookkeeping actually is. We believe that by educating our clients on bookkeeping in general, we can give them a better understanding of what they need from the finance function of their own business.
Bookkeeping (book-keeping or book keeping) is the recording of all financial transactions undertaken by an individual or organisation. The organisation may be a business, a charitable organisation or even a local sports club. Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left." A financial transaction is any event that involves money.
Individual and family bookkeeping involves keeping track of income and expenses in a cash account record, bank account statements, credit card statements, or savings account passbook. Individuals who borrow or lend money also track how much they owe to others or are owed from others.
Two common bookkeeping methods used by businesses and other organisations are the single-entry bookkeeping system and the double-entry bookkeeping system. Single-entry bookkeeping uses only income and expense accounts, recorded primarily in a "Revenue and Expense Journal". Double-entry bookkeeping requires posting (recording) each transaction twice, using debits and credits.
Individual and family bookkeeping involves keeping track of income and expenses in a cash account record, bank account statements, credit card statements, or savings account passbook. Individuals who borrow or lend money also track how much they owe to others or are owed from others.
Two common bookkeeping methods used by businesses and other organisations are the single-entry bookkeeping system and the double-entry bookkeeping system. Single-entry bookkeeping uses only income and expense accounts, recorded primarily in a "Revenue and Expense Journal". Double-entry bookkeeping requires posting (recording) each transaction twice, using debits and credits.
What should you look for in a bookkeeper?
A bookkeeper is a vital part of the jigsaw in managing the financial aspects of your business and ensuring compliance with legislation.- Are they qualified - having formal qualifications shows commitment and dedication to the profession.
- Are they experienced - sometimes qualifications are not overly important but no qualifications and no relevant experience is not a good mix.
- What software packages do they support? - do they support Sage, MYOB and QuickBooks?
- Are they a sole practitioner? What happens if they are ill or are unable to cope with the workload?
- Do they offer a money back guarantee?
- Do they have acceptable service level agreements?
- Are they currently up to date with business legislation?
