Bookkeeping or books of original entry records all the financial transactions of a business. The bookkeeping process is essential for every business. It involves classifying, recording and summarising the financial transactions of a company. The bookkeepers record and maintain the books of account.
The bookkeepers used to record all business transactions manually on the journals and ledgers. However, with the advancement of technology, bookkeeping can be done through bookkeeping software. Most of the accounting software includes bookkeeping software also.
There is a thin line that differentiates bookkeeping and accounting. Thus, the accounting software includes bookkeeping software which allows the users to record debit and credit transactions.
Bookkeeping helps to keep track of payments and receipts. It records and summarises the income and expenditure of a business periodically. The bookkeeping records are used to prepare the financial statements that include the profit and loss account and balance sheet.
Thus, the three primary elements of bookkeeping software are:
The bookkeeping software usually contains the following features:
Bookkeeping software greatly helps small businesses that have a daily routine of keeping their books of accounts up-to-date. A bookkeeping software simplifies data entry, organises vital information, provides reports and grants more access for accountants to crucial financial information about different aspects of the business.
It helps the bookkeepers, accountants for preparing financial reports and statements. It also helps the business owners by providing easy access and information on the financial transactions relating to the business.
Bookkeeping is essential for a business, records all financial transactions. It can be done manually or through software. Key elements include journal, ledgers, and financial statements. Features of bookkeeping software: custom invoicing, instant reporting, inventory tracking, automate banking, remote access. Functions: billing, verifying invoices, recording payments, financial reports, monitoring AR. Benefits: simplifies data entry, provides crucial financial info, helps with preparing reports.