What is bookkeeping?
Bookkeeping is the systematic recording and organising of financial transactions in a company
Starting and maintaining solid, professional accounting practices is essential for the growth of a business.
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. All bank, credit card and loan accounts are reconciled monthly by our team for accuracy.
Essentially, bookkeeping means recording and tracking the numbers involved in the financial side of the business in an organised way. It is essential 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
Bookkeeping and accounting are often heard being used interchangeably, however, accounting is the overall practice of managing and analyzing finances of a business or individual, while bookkeeping refers more specifically to the tasks and practices involved in recording the financial activities on a daily basis.
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 taxes, 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.
Where are you located?
We operate out of Stony Plain Alberta, but we service the entire Edmonton and surrounding areas (including Spruce Grove, St. Albert, Nisku, and, of course, Edmonton).
Any other questions?
Get in touch with us to find out how bookkeeping might be for you by selecting the contact link below.