Many people are often interested in knowing the process and actual procedure of bookkeeping. The bookkeeping is merely involved in maintaining the records of all the finances and expenses that have been so far used in the company and business history.
This process is enormously necessary for carrying out the proper records because it makes the foundation of the company’s status. Those people who make out the bookkeeping records are known as the Bookkeepers.
Many people are often interested in knowing the process and actual procedure of bookkeeping. The bookkeeping is merely involved in maintaining the records of all the finances and expenses that have been so far used in the company and business history.
This process is enormously necessary for carrying out the proper records because it makes the foundation of the company’s status. Those people who make out the bookkeeping records are known as the Bookkeepers.
They make use of sales, book, cash books, and purchase books that resemble hugely with the accountant system as well. But here we would like to mention that there is a huge difference between the accountant system work and the bookkeeping.
In the bookkeeping process each time the person gets with the settlement of the records and each time the transactions are made in favor of the company. Each and every single enrollment of the credit and deposits are held down in the bookkeeping files and folders.
Cheques are also listed in this process but that’s merely possible in the situations of keeping the money out of the bank. All the details right from the beginning of the cash payments of the purchases to the sales matter are taken into custody by the bookkeeper.
As we know bookkeeping has been so far categorized into two main forms. One is the single-entry system and the second is the double-entry system. In view of the single system, all the entries are just recorded only ones.
All those people who favor the use of cheques grant their massive attention to the single-entry bookkeeping system. Furthermore, at the end of each month, the whole records are calculated in order to get matched with the summary stand of the records for answering the owner of the company. In the double bookkeeping system, the credit and debits are also counted. But make sure one thing the credits and debits are the same and must be equal.
In the final stages of the process, some changes are made in the balance sheet that equalizes the whole finances and expenses as well. In such changes, we would like to mention the names of a few changes added together with the income statement and the balance sheet that signifies the financial position of the company.
Moreover, the changes are also witnessed in the cash flow as well. At the end of the process, the clear and neat image of the bookkeeping is recorded that puts together the perfect image of the flow and cash requirements.
On the whole, after the detailed overview discussion on the process of the bookkeeping, it is quite evident that all the procedure involvements in the process have their own significance and importance for the company. Each step should be carried out with full attention and interest because a single mistake can lend you the hand of facing huge troubles and difficult circumstances in the future as well.
ABOUT THE AUTHOR: Nancy Suzan
