Bookkeeping

What is Bookkeeping?

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. As without accurate bookkeeping the management accounts become unreliable due to the fact that bookkeeping provides the information from which accounts are prepared. It’s a distinct process, that occurs within the broader scope of accounting.

Each transaction, whether it pertains to a purchase or a 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

It means recording and tracking the numbers involved in the financial side of the business in an organised way. It is necessary for businesses but is also useful for individuals and non-profit organisations.

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
  • Bank reconciliation

The terms bookkeeping and accounting are often 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.

Bookkeeping helps in:

  • Budget for your business
  • Prepare for tax returns
  • Keep your business organized

 

Contact us for your best experience. We are UK based accounting services agency provides services regarding business advisory, management accounts support, Annual accounts preparation, VAT returns and personal tax preparation.