Outsource Bookkeeping to Avoid Backlogs and Faults

The process of recording and classifying business transactions of financial nature is described as bookkeeping. In simple words, it refers to preserving the financial operations of a business or an individual in the books of accounts. Bookkeeping aims at writing down and reviewing financial affairs into a standardized form in order to give information regarding the financial position of a business. Bookkeeping function of a firm is carried out by a bookkeeper, commonly being called as an accountant. He or she is in charge of keeping a record of a business organization’s everyday financial transactions manually or electronically posting all of its transactions into a journal and which are then further posted in general ledger accounts and subsidiary ledger accounts.

Due to recording and re-recording of a large number of quantities along with the manual computations, it is not practical to assume that the bookkeeping process will be completely faultless. This probability of committing mistakes made it necessary, from time to time, to “prove” that a business’ accounts are “in balance”. It means that the total of the debit balances of accounts must be equivalent to the total of the credit balances of accounts. A statement of accounts known as a trial balance is prepared in order to assess the arithmetical correctness of books of accounts. If the debit balances and the credit balances do not match, it indicates that there is some error and bookkeeper needs to find the error and correct it. Once the trial balance gets balanced, the bookkeeping stage is finished. After this, the books of accounts, thus prepared, are handed over to accounts manager for the preparation of financial statements.

Today, the use of computers has facilitated the process of bookkeeping. As a result, the probability of committing the error has considerably, decreased and efficiency has increased. Since the journal entries are recorded electronically and accounts balances are evaluated…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *