What is bookkeeping and why is it important?

Accounting is the business of summarizing and representing the financial information of a company in a comprehensible format. The two main tasks done by accountants are making sure that all transactions have been properly recorded and reported, and analyzing those records to determine a company’s financial situation.

Many companies do not have dedicated members on their staff for bookkeeping, so external help must be sought out from freelance or specialized firms. Unlike most other fields in finance, there is no specific education or training requirement for those who work as bookkeepers outside of being fluent in one or more languages, legal regulations applicable to them as they work with small businesses, and basic computer competency.

WHAT IS BOOKKEEPING?

The most basic explanation of bookkeeping is that it is the record-keeping part of accounting. But it’s more than that. In the future, we will look at how keeping records and inventories make possible managers’ ability to make decisions.

In business, record-keeping is usually handled by some kind of manual system. Small or medium-sized companies may use spreadsheets, while large corporations may use computers with specialized software to do their accounting. Since any change made in one system will affect another, a lot of complex systems exist involving many people from other departments such as purchasing, payroll, sales, and perhaps human resources as well.

A business owner, for example, may want to know how much money a sale will bring to figure out if he has enough available cash in his checking account to pay his bills at the end of the month. The general ledger—a large file that contains all account-keeping records—can be used to obtain this information.

What does a bookkeeper do?

A bookkeeper’s job is to keep track of what has been spent and what has been brought in by the company they are employed with. A Business Manager typically controls their employer’s books which often consist of recording day-to-day transactions, managing cash on hand, balancing accounts receivable vs payable. Other tasks include preparing and processing payroll, issuing checks, making sure returns and allowances comply with government laws and regulations. Bookkeepers are responsible for recording sales, purchases, and the movement of inventory during a business’s day-to-day operations.

Bookkeepers track financial transactions in various ways depending on their industry. A bookkeeping system is a set of procedures used to record financial transactions. Some systems can be very complex; others may be very simple. Each company that uses a particular bookkeeping system has its own set of rules for recording transactions, so it is important for anyone using the company’s accounting records to understand how to interpret the information contained in them.

Bookkeeping Services is all about communication!

All bookkeepers must be able to communicate with their clients and other people responsible for the success of the business, such as accountants and managers. Bookkeeping is all about communication because it involves discussing draft financial reports, demonstrating good communication skills to maintain a positive working relationship. These skills can help an employee develop into an effective team member and build a lasting relationship with their employer. 

In addition, business skills are useful for helping employees understand how their position impacts their performance and for developing career opportunities outside of the workplace. We at Thakur Chabert bring you the best bookkeeping services in London with experienced accountants. We are the certified auditors and accountants in London, UK.