Every business organization has two main functions, i.e., bookkeeping and accounting. Bookkeeping records the financial transactions and deals with financial data, require basic accounting knowledge, classify, and generates reports using financial knowledge. Bookkeeping is important for businesses and useful for individuals and non-profit organization. Companies make key operating, investing, and financing decisions with proper bookkeeping.
Tasks Involved in Book Keeping:
Bookkeeping helps small business owners to manage their finances and create financial statements which help them run their business effectively. The tasks involved are:
Collection of bank statements and other source documents is one of the main tasks of bookkeeping. These statements are collected and analyzed to make sure that the bank has not made any mistake in recording deposits or withdrawals. Later, the bank statements are used in the accounting cycle and for verifying the accuracy of financial statements.
Journal entries are created using the source document, which is then posted into the ledger; the bookkeeping tasks to ensure the accuracy of financial reporting, which is done on a daily basis. The debits and credits posted into the ledger depend upon the business accounts and the transactions which occurred. Inaccurate journal entries will result in inaccurate financial statement which will become a hurdle in making the right decision for the business, so a bookkeeper needs to post the right entries.
Bank accounts reconciliation is also one of the tasks of bookkeeping to ensure that the cash in the bank matches the account balance mentioned in the ledger. Account reconciliation helps in preventing serious errors in financial statements.
Record Customer Billing:
Customer billing statement and invoices are recorded so that the owner’s have easy access to the status of customer’s payment. Small Business owners get distracted easily due to other tasks. Bookkeeping makes it easy do they don’t send the same invoice twice.
Review Forecasted Cash flow:
Bookkeeping constantly gives an idea to the business owners where their cash flow is going so that they could make their weekly or monthly adjustments accordingly.
Book Keeping Companies:
There are many bookkeeping companies like Richard Darcy, which could provide efficient and professional bookkeepers who could provide you various services to your business bookkeeping requirements. Online bookkeepers who are expert in online bookkeeping software are also available to help grow their businesses.