Bookkeeping is one of the most outsourced functions of today’s accounting firms and businesses. A fairly large amount of accountants would gladly tell you it’s not worth their time to do your bookkeeping. Accountants at International Accounting & Tax Consultants feel just the opposite. Bookkeeping and accounting are really not the same thing. Bookkeeping is just one of the many functions of accounting. Accounting encompasses many different functions involved in managing the financial affairs of a business. Accountants do prepare reports based largely on the work of the bookkeepers.
Bookkeeping is a crucial record-keeping task. Bookkeeping is considered entry level work, but it actually forms the foundation of information your accountant uses. When transactions are not properly recorded it’s costly to have to go back through your books and find the error. Preparing source documents for all the operations of a business. The transactions recorded cover buying, selling, transferring, paying and collecting activities. The source documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeeping involves the ability to determine and enter in the source documents the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.
Bookkeepers also make entries of the financial transactions into journals and accounts. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
Bookkeeping involves preparing reports at the end of specific periods of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to ensure that they’re as error-free as possible. A bookkeeper also compiles the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have thousands of accounts. You have probably heard once or twice before about closing the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized. Bookkeeping is still an important task for any company. Give your company the best foundation you can by using knowledgeable professionals like those at IATC.