When you are doing business, bookkeeping is the most crucial part of your financial operations. It records all your business transactions that include your amount, dates, sources of all business revenue, gain, expense and loss transactions in detail. It is basically the starting point of your accounting process. Is your business making money? How much? Has it seen a little improvement than previous month? All these details could be answered when you are maintaining a proper book for your accounts. You are ready to answer your managers and owners with the gathered information.
involves the debit and credit system to track down the business’ financial transactions in a specific account. Every accounting system has a chart of account and its every transaction is different. The chart of account lists the various accounts and the categories under which it falls.
The Journal is kept in a chronological order with all transactions properly recorded. These journal entries are made from invoices, purchase orders, sales receipts that are kept in a file for a specified time.
These days the bookkeeping is also performed by outsourcing. Various small and medium business or the CPA firms connect with the organizations providing outsourced service and get assistance in invoicing, expense accounting, account processing like credit cards transactions, credit cards reconciliation and much more.
Bookkeepers also take trial balances sporadically to ensure that the journal entries have been entered accurately in each and every account. A trial balance is simply a total of all of the debit balances and credit balances in the ledger accounts. The debit and credit balances are matched, they should come out to be equal if they are not then there are bound to be some errors in the trial balance.