What is Bookkeeping?
Bookkeeping, commonly referred to as keeping the books, is the process of keeping full, accurate, up-to-date business records. Proper bookkeeping can help businesses effectively manage cash flow, stay abreast of profits and losses, and develop plans for the future based on financial trends. Furthermore, accurate bookkeeping is required by both federal and local tax agencies. Bookkeeping involves making a record of the monies received by a business as well as the monies paid out. It encompasses money a company owes to vendors, employees, tax agencies, contractors and any other individual or entity. Likewise, accurate records of amounts owed to a company by outside individuals and organizations are also recorded in a company’s books. Though necessary and beneficial to business owners, the task of bookkeeping can be very time consuming. With no exceptions, every monetary amount that is paid or received must be recorded. Additionally, accuracy is of the utmost importance, making keeping th
In bookkeeping, an accountant keeps a comprehensive record of how much your business owes creditors and how much is owed to you. The records of these transactions also indicate how much you have invested in equipment and inventory. Typically, accountants handling the books take care of accounts receivable and accounts payable, put together financial statements (such as balance sheets, income statements, and cash flow statements) and take care of bank reconciliation. The cost climbs as the volume of work expands. The more transactions and the more statements you expect your accountant to prepare, not to mention how often you want these financial statements whether they be monthly or yearly, the more you’ll pay.
