Bookkeeping is a term that often causes confusion. Many associate it with libraries and bookshops, while in reality it is concerned with financial records. The task of bookkeeping is more important than ever before because many businesses are diversifying and going global. This means more financial records to keep. In fact, many companies in the United States are outsourcing bookkeeping functions to firms within the country and abroad.
Bookkeeping involves documenting all the financial transactions of firms or individuals. Individuals who require bookkeeping services include celebrities and small entrepreneurs. Organizations can range from clubs to MNCs. Bookkeeping may be single or double entry. In the former system, only payments are listed. In the latter case, records of sales, purchases, payments, and receipts are maintained by clerks in the daybooks. They are also responsible for entering data in the respective ledgers, ie, customer, supplier, or general. Bookkeepers use these data to prepare trial balance. This is in turn are used by financial accounts to prepare the balance sheet and the profit and loss statement.
Bookkeeping functions
- Entry of accounts receivables and payables
- General Ledger entries
- Document management
- Keeping a tab on VAT
- Maintaining record of bank and credit card statements
- Writing financial reports or summaries
- Balancing or trial balancing of books
Apart from the above, bookkeepers make bank deposits for their employers by obtaining transaction data from cashiers, verifying the receipts, and sending money to the bank in the form of cash, check, or DD. Computerization has added to the responsibilities of many bookkeepers, who are now required to handle procurement and billing. Bookkeeping clerks earlier required education and training related to accounts only, but today good communication skills are essential for this job. This is because many clerks need to interact with customers and clients through letters, e-mail, and phone calls. This becomes all the more important in the case of outsourced bookkeeping. Firms offering outsourced bookkeeping services provide 24/7 service, weekly/monthly data updates, and quick redress of queries. They also tend to be more cost effective if your company needs large volumes of data to be documented for future use.
In the past, bookkeepers entered and maintained data on paper and stored them as files and ledgers. Today, computers and special accounting software have made their task easier. It is possible to quickly enter loads of data, keep back ups, and retrieve data with the click of a mouse.
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