What you ought to know about Book Keeping

Book Keeping is the process of recording financial transactions that is mainly covered under accounting. Single entry book keeping and double entry book keeping are two types of book keeping methods. Any transaction that is done in the organization which includes purchases, receipts, sales and payments alternatively called as book keeping. The person who takes cares of all this is known as book keeper. In olden days, book keeping services are done in manual method but everything is computerised now. Books of first entry are called as journal and it is usually prepared for a month and all the columns of the journal are totalled for the given month. A ledger is a collection of related accounts.

Any book keeping should be simple, consistent and reliable. It is advisable to keep only the records which are needed and keep alerts for the important dates like quarterly filing.  Book keepers always check the trial balance on a frequent basis to make sure that the journal entries have been posted correctly to the associated account. A trial balance tells about all the totals of debit balance and credit balance and balance should be equal, if not something is wrong in the transaction.

Book Keeping service is hired from the third party vendor to reduce the organizational costs and the benefits would include running payrolls, annual tax filing, accounts receivable and accounts payable, employee withholding and to ensure free time. It is always better to hire an expert accountant rather than internal hire for the book keeping service. Book Keeping service will prepare financial statements, bank statements, mortgages and bill of sales, insurance records, audit reports of accounts, duplicate deposit slips, contracts and leases, gross receipts, legal and important correspondences.

QuickBooks Pro and Peachtree are the two online softwares that are available to make the accounting easier and the data is stored permanently.  This kind of software is helpful as we can manage the accounts paperless and security of the data is maintained with the help of a password. Some of the important terms used in QuickBooks Pro are assets, liabilities, expenses, revenue and equity. Some of the benefits of book keeping system are business valuation , to detect errors and frauds, to calculate the goodwill of a partner, helps in raising loans, they can act as a proof in the court when needed and the human brain cannot remember all the accounts and hence the data is stored. We can monitor how the budget of a project is used to complete it. It saves time and money. It also helps to create transparency so that everyone can know about it, about the information how profits are earned and how loss is done to a company.