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How Bookkeeping Helps You and Your Business

All the transactions that are affecting how your business operates get recorded in account books and the process of doing so is known as bookkeeping and it is the very first function with regards to the process of accounting, wherein every financial activity get recorded in order for dependable financial statements to be gleaned. Through it, any matters concerning accounting where item exchanges, with their corresponding monetary values, get recorded as business transactions. Additionally, the one who leads this activity is somebody you know by the term “bookkeeper.”

Bookkeeping Tasks

The tasks involving bookkeepinginclude recording transactions like collections, purchases and sales, among others, and they’re all arranged in a chronological manner. The sources for such transactions include official receipts, purchase invoices and sales receipts. Your bookkeeper records each detail of such documents, especially the amount, as part of their job. It requires that they are diligent and patient in order to properly account all the transactions that your business has done. All the figures that are going to be reflected in these financial statements will be based on your bookkeeping records. In case these amounts don’t get properly recorded, you can expect your financial statements to not be properly presented and thus be quite unreliable.

Difference Between an Accountant and Bookkeeper

Your accountant is going to maintain the checking and balancing of all the transactions that were posted by your bookkeeper, using them to analyse each result of your business transactions. Apart from these two, there’s the internal auditor who will examine if your account books are properly presented. Your internal auditor is going to verify the compliance with the company’s procedures as well as internal control policies regarding accounting matters as well as business operations in general. It’s an absolute must to make sure that your bookkeeper does their bookkeeping work properly when it comes to recording all business transactions. In doing so, a counter-checking system gets applied in order for every financial statement to be free from all material misstatements. Therefore, the results of your business could be properly analysed as well as interpreted by everyone concerned, including you and certain government regulatory offices, just to name a few.

Plan for the Future

Through effective bookkeeping work, your financial statements are going to turn into effective tools in deciding on whether or not you should invest more or less money in your business operations. In a similar fashion, government regulatory offices are going to properly verify if the correct fees as well as taxes have been paid.

 

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