BOOKKEEPING

 is the recording of financial transactions, and is part of the process of

accounting in business. Transactions include purchases, sales, receipts, and
payments by an individual person or an organization/corporation.

 Bookkeeping is the systematic recording and organizing of financial

transactions in a company.
Bookkeeping is the recording, on a day-to-day basis, of the financial transactions
and information pertaining to a business. It ensures that records of the individual
financial transactions are correct, up-to-date and comprehensive. Accuracy is
therefore vital to the process.
 Bookkeeping provides the information from which accounts are prepared.
It is a distinct process, that occurs within the broader scope of accounting.
 Each transaction, whether it is a question of purchase or sale, must be
recorded. There are usually set structures in place for bookkeeping that are
called ‘quality controls’, which help ensure timely and accurate records.

BOOKKEEPING TASKS
Essentially, bookkeeping means recording and tracking the numbers involved in
the financial side of the business in an organized way. It is essential for
businesses, but is also useful for individuals and non-profit organizations.
The person(s) responsible for bookkeeping for a business would record all
transactions that are related, including but not limited to:
 Expense payments to suppliers
 Loan payments
 Customer payments for invoices
 Monitoring asset depreciation
 Generating financial reports
Bookkeeping and accounting are often heard being used interchangeably,
however, accounting is the overall practice of managing finances of a business or
individual, while bookkeeping refers more specifically to the tasks and practices
involved in recording the financial activities.
WHY BOOKKEEPING MATTERS
While it may seem obvious, detailed, thorough bookkeeping is crucial for
businesses of all sizes. Seemingly straightforward, bookkeeping quickly becomes
more complex with the introduction of tax, assets, loans, and investments.
Tracking the financial activities of a business is the truest purpose of bookkeeping,
meaning it allows you to keep an up-to-date record of the current incoming and
outgoing amounts, amounts owed by customers and by the business, and more.

TRADITIONAL BOOKKEEPING
Bookkeeping has a long history as an integral part of accounting. Traditionally, it
involves ledgers, charts of accounts, and a tedious double-entry system.
Here we'll cover how the main activities are recorded in traditional bookkeeping
practices, which are still used to this day.

RECORDING TRANSACTIONS
In principle, transactions must be recorded daily into the books or the accounting
system.
For each transaction, there must be a document that describes the business
transaction. This could include a sales invoice, sales receipt, a supplier
invoice, a supplier payment, bank payments and journals.
These accompanying documents provide the audit trail for each transaction and
are an important part of maintaining accurate records in the event of an audit.

DOUBLE-ENTRY BOOKKEEPING
The double entry system of bookkeeping is based on the fact that every
transaction has two parts, which therefore affects two ledger accounts.
Every transaction involves a debit entry in one account and a credit entry in
another account. This serves as a kind of error-detection system: if, at any point,
the sum of debits does not equal the corresponding sum of credits, then an error
has occurred.
BOOKKEEPING OPTIONS TODAY
It seems there is no industry that advances in technology (read: the internet) has
not affected. Bookkeeping is no exception. Bookkeeping used to involve multiple
ledgers, then multiple Excel files...essentially an inordinate amount of paper or
computer files. Storage quickly becomes an issue and organization can be a
challenge.

 Technological advances facilitated a move to a computer-based system,

with software available to purchase and download to a desktop. Even then,
these programs could be costly and slow.
Continued development have led to what is available today: 100% online
applications, backed up in the cloud, with unlimited storage. This means no
downloads and buggy updates, no concern over losing documents due to
computer crashes or viruses, and no problems with storage space online or off.
New options have also been opened by the boom of Android and iPhone mobile
apps, allowing you to manage your accounting even on the go.