HOW TO DO HOW TO DO HOW TO DO BOOKKEEPING BOOKKEEPING BOOKKEEPING
UNDERSTANDING THE BASICS OF BOOKKEEPING
You will be guided through numerous key bookkeeping tasks in this post The best part is that following along will familiarize you with the essentials of accounting and bookkeeping processes Discover more!
GAUGE THE COMPLEXITY OF YOUR BUSINESS
One of the first decisions you must make when setting up your bookkeeping system is understanding the volume and complexity of the financial transactions that your business conducts These elements will help you choose between a cash-based and accrual-based accounting system
MASTER THE CHART OF ACCOUNTS PRINCIPLE
Understanding the company s core accounts, which include assets, liabilities, and equity, is necessary for effective bookkeeping
Examples of the company s tangible assets includes inventory accounts receivable, accounts for fixed assets, and records for accounts payable
UNDERSTAND THE PROCESS
A bookkeeper’s main duties include classifying and journalizing transactions as well as making sure that every transaction is properly accounted for Processing customer payments and balancing bank accounts are also included They also frequently offer services like managing your invoice payments and accounting reporting
RECORD TRANSACTIONS
Anytime a transaction takes place it must be documented Hence creating entries in your journal is the process of recording your financial transactions
Debits and credits are terms used by bookkeepers to describe the dual nature of business transactions They make it possible to see where money is coming from and going to
ADHERE TO THE STANDARDS
Ideally, every financial transaction including incoming invoices, outgoing bill payments, purchases, and sales should be recorded regularly each week Make sure that from one fiscal year to the next, transactions and occurrences are consistently recorded This consistency throughout time avoids the distortion of financial records and guarantees that the information in business reports is true and trustworthy
