Bookkeeping: The Foundation of Financial Accuracy
Bookkeeping is the process of recording and organizing all financial transactions that occur within your business. It serves as the groundwork for accounting and provides the essential data needed for financial analysis.
Here’s what bookkeeping entails:
Recording Transactions
Bookkeepers systematically record every financial transaction, including sales, purchases, expenses, and payments. This is done on a daily or weekly basis to ensure that all data is current.
Organizing Financial Data
Bookkeepers categorize each transaction by type (e.g., revenue, expense, asset, liability) and post it to the appropriate account in your ledger or accounting software.
Managing Accounts Payable and Receivable
Bookkeepers track money owed to your business (accounts receivable) and money your business owes to vendors or creditors (accounts payable). They ensure timely invoicing and follow-up on payments while also managing bills to avoid late fees.
Bank Reconciliation
To ensure accuracy, bookkeepers regularly reconcile your company’s financial records with bank statements, ensuring that everything aligns correctly and identifying any discrepancies.
