subject: How Can A Bookkeeper Help You? [print this page] How Can A Bookkeeper Help You? How Can A Bookkeeper Help You?
All financial transactions that a business engages in must be carefully and accurately recorded. This includes not only sales and purchases, but also income revenue and expense payments. The bookkeeper's role is to maintain these records with complete accuracy. Bookkeeper's are not the same as accountants. The bookkeeper's records are what an accountant will use to create the necessary financial reports.
Bookkeepers help business in immeasurable ways. Depending on the size of the business, the bookkeeper can use the single entry method where most transactions, including money made and money going out is kept in a an expense ledger. This is a great and simple method for small businesses. Then there is the double entry method. This way of doing books is not as simple but there are less mistakes since there are two separate sections where income and expenses are written down and they are balanced against each other based on simple math.
There are several different books that are used for recording financial transactions. The daybook is used to record the details of a transaction, but not all businesses maintain daybooks. Some companies choose to simply use journals. The information from the journals is then recorded in ledgers according to their corresponding category of purchases, sales, cash, credit, and so on.
Income statements and balance sheets are created from ledgers, which include various financial data that is divided into sections. The general, or nominal, ledger details the various income, expenses, liabilities, and assets of a business. The customer, or sales, ledger illustrates the various financial information transacted with customers. The supplier, or purchase, ledger shows the company's transactions with various suppliers.
A trial balance stage is used to help a bookkeeper check the books for any mistakes. If the debits and credits of each ledger do not match, the bookkeeper knows there is an error. When using the double-entry method, the credits of a transaction must balance with the debits. The bookkeeper separates the debits and credits into two columns up until a particular date, constructing a worksheet that details each ledger account's balance.
Bookkeeping is not a simple job and the task is not one that is done quickly. Most companies require at least one full-time bookkeeper and it is common for large companies to have several bookkeepers. However, smaller businesses may outsource the bookkeeping work by hiring a service to handle this job for them. When a bookkeeping service is used, a bookkeeper will spend a few hours a week at the company working on the records and being sure that the books stay in balance.
