What is Bookkeeping

Bookkeeping is one of the components in the accounting of a business process. Although it may sound like a job for a librarian, it is actually quite the opposite, as it involves a bookkeeper and an accountant.

A bookkeeper is a person who records the daily financial transactions of a business or a person who records his daily transactions for personal finances. Despite done by a person whose job is to book keep or by a person who does it for personal references, their position is similar as at the end of the day where they keep records of any financial affairs that have taken place.

This includes keeping records of the purchases, sales, receipts, and payments by an individual or organization. It is done in an extremely systematical way to avoid the individual or business from getting into a financial muddle. In this day and age, getting into a financial disorganization due to carelessness done by the bookkeeper is not something you would want to go through.

Some methods used in the process of bookkeeping are the single entry system and the double entry system. This can help you to differentiate whether the first method is better for you to use and apply for yourself or the latter. However, another process that includes you to record any financial settlement is a bookkeeping process since we are all about the documenting of investments.

Individuals who use personal finance software more commonly use the single entry system since they balance their checkbooks at the end of each month. All of the transactions done are recorded only once in a one sided accounting entry, which is used to maintain systematic information of the finance. Small businesses use this method too to record their “bare essentials”.

The double entry method is used mostly by big organizations that deal with other organizations and clients and their journal summaries are then transferred to their respective ledgers. Their recordings carry the names of the accounts and contain three columns: the names of the account in the ledger (which have a non-zero balance), the debit column and the credit column.

For both entries, the columns are then each totaled to give a summary for the period of typically a month. The bookkeeper will carry out a partial check called the unadjusted trial balance in order to make sure that the columns have an agreement in their total. Any errors are then rectified and adjusted before an accountant, who does changes in some of the account balance, checks it.

If you need a bookkeeper in Victoria, please contact me as I would love to help.