Introduction
Bookkeepers are assigned to maintain an organization’s essential accounting records. Daily transaction records of income and outgoings, and their posting to various accounts is the crucial task performed by a bookkeeper.
With the help of precise financial records, supervisors and businessmen find solutions to central questions regarding profit and loss, trends in cash flow, and instability.
Definition
A bookkeeper refers to the one who manages and records all the financial data. The task of a bookkeeper includes tracking all the business transactions—total amount, time, and base of all business income, expense, loss, and gain transactions.
The bookkeeper is the one who establishes the starting point of the accounting process. An organization can only keep a regulated check on its profits and losses with the correct financial records.
Moreover, the bookkeeper makes sure that they stay balanced and within budget.
The Procedure Of Bookkeeping Consists Of Four Basic Steps:
- Analysis of financial transactions and allocating them to particular financial records
- Recording unique journal entries that credit and debit the suitable financial records
- Placement of entries to ledger accounts
- Adjusting entries by the completion of the respective accounting period
Job Responsibilities Of Bookkeeper
Working as the engine room of an accounting team, a bookkeeper is dedicated to retaining various ledgers used to create critical financial reports.
An ideal bookkeeper is a planned candidate, well-versed with figures and bookkeeping data.
Bookkeeper job responsibilities normally include:
- Tracking and posting transactions like income and expenses
- Dispensation of payments
- Directing regular banking happenings
- Generating several financial accounts
- Settling accounts to third-party accounts
To do the bookkeeping ideally, the bookkeeper must be familiar with all the diverse account sorts. Ten basic types of accounts used in bookkeeping include:
Accounts Payable
Accounts payable characterizes the cash a business has to repay through different procedures like notices and bills from sellers.
Accounts Receivable
Accounts receivable conflicts with accounts payable, the money due on your business from your clients.
Cash
A cash account keeps all business transactions licensed to check all the financial activities, including recording cash expenses, drawings, and credits.
Inventory
All in-stock products of a business need to be tracked and accounted for. The bookkeeper can track inventory using two methods, periodically or at the time of sale.
Loans Payable
When you borrow money for buying equipment, these expenditures lie under the category of loans payable that keeps a check on what you owe, or what’s due to be paid.
Owner’s Equity
The owner’s equity account denotes the total each owner invests in business dealings.
Purchases
Tracking of any raw materials or finished goods that a business buys. The cost of goods is calculated by subtracting from the sales account to calculate the gross profit of your business.
Payroll Expenses
Keeping this account accurate and always updated for your business needs to meet tax-reporting criteria is the most substantial.
Retained Earnings
When bookkeeping, the retained earnings account notes your business’ profits that you invest into the business and do not save for yourself or give out to other owners.
Sales
The sales account records all incoming revenue from what the business sells. A bookkeeper records the sales accurately and on time to determine the business positions.
How To Become a Bookkeeper?
Training And Skills Requirement For Bookkeepers To Perform Their Tasks Efficiently
Training:
Typically, Bookkeepers initiate their operations without possessing any particular qualification. Yet, maximum companies do prefer applicants with complete certificates or diploma courses in bookkeeping, while other companies only appoint applicants with bookkeeping certifications.
Education, Experience, and Licensing Requirements:
- Relevant bachelor’s degree in finance, accounting
- CPA gives an advantage
- Prior bookkeeping understanding
- Experience in working with multiple legal individuals
Skills:
Bookkeepers should possess various skills and talents to accomplish their tasks competently and successfully:
- Critical and intellectual skills
- Problem-solving skills
- Computer skills
- Time management skills
- High levels of accuracy
- High levels of concentration
- High ethical standards
- Developing Standards
- Reporting Research Results
Conclusion:
Good bookkeeping is a vital segment of virtuous business management. By enabling the corporate owners to sustain expenditures done for the business, it also opens the way for thorough, precise, and appropriate records that can demonstrate value to management decision-making, or in the occasion of an audit.
A sound bookkeeping system is the like the base of collecting the information necessary for a business. Hence, it can act as a stepping-stone toward a more specialized accounting part.
