TH Book Service

Bookkeeping or the so called “journals” is the recording of financial transactions. Transactions include (sales, purchases, income, and payments by organization or by an individual. Bookkeeping is usually performed by a bookkeeper. Bookkeeping should not be confused with accounting. The accounting process is usually performed by an accountant. The accountant or accounting one creates reports from the recorded financial transactions recorded by the bookkeeper. There are some common methods of bookkeeping such as the Single-entry bookkeeping system and the Double-entry bookkeeping system. While these systems or methods may be seen as “real” bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.

A bookkeeper (or bookkeeper) also known as an accounting clerk or accounting technician, is a person who records the day to day financial transactions of an organization. A bookkeeper is responsible for writing the daybooks. These daybooks consist of purchase, receipts, payments and sales. A daybook is a chronological record of day to day financial transactions also called a book of original entry. The daybook’s details must be entered formally into journals to enable posting to ledgers. Daybooks include:

Sales daybook used for recording all the sales invoices.

Purchases daybook used for recording all the purchase invoices.

Sales credits daybook used for recording all the sales credit notes.

Cash daybook also known (as the cash book) used for recording all money received in, and payments daybook for money paid out.

Purchases credits daybook- used for recoding all the purchase credit notes.

The bookkeeper is responsible for ensuring all transactions are recorded in the correct daybook, general ledger, supplier ledger as well as customer ledger. He/she brings the books to the trial balance stage. An accountant may prepare the income statement and balance sheet using the trail balance and ledgers prepared by the bookkeeper.

There are two common bookkeeping systems used by businesses and other organizations: the single entry bookkeeping system- uses only expense and income accounts, recorded primarily in a revenue and expense journal. The other one is the double entry bookkeeping requires posting each transaction twice, using the credits and debits.

Bookkeeping and financials are likely twin sister.

While learning, you can find that income statement is defined as a report that provides accounting information about a government entities, interested parties, stock holders, share holders. The information provided in this statement is a result of operations like for instance (loss or profit) Income statements are produced by a business at various periods. This is produced daily, monthly, yearly depending on a company. This statement allows the users quickly get simplified.

Main parts of the income statement:

Total revenue- this is the gross amount for which goods were sold or services were provided to the consumers or costumers of the business. Revenue reflected in the income statement is not equal to the cash received from consumer for the goods.  It is the total money received from the sale. It is calculated by taking the price of the sale times the quantity sold.

Cost of service provided or cost of goods sold- In financial accounting, cost of goods sold (COGS) includes the direct costs attributable to the production of the goods sold by a company. This amount includes the materials cost used in creating the goods along with the direct labor costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. It appears on the income statement and can be deducted from revenue to calculate a company’s gross margin.

Gross profit- In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Note that this is different from operating profit (earnings before interest and taxes).

Operating expense- An operating expense, operating expenditure, operational expense, operational expenditure or OPEX is an ongoing cost for running a product, business, or system. Its counterpart, a capital expenditure (CAPEX), is the cost of developing or providing non-consumable parts for the product or system. For example, the purchase of a photocopier is the CAPEX, and the annual paper, toner, power and maintenance cost is the OPEX. For larger systems like businesses, OPEX may also include the cost of workers and facility expenses such as rent and utilities.

Operating profit- In accounting, profit is the difference between price and the costs of bringing to market whatever it is that is accounted as an enterprise (whether by harvest, extraction, manufacture, or purchase) in terms of the component costs of delivered goods and/or services and any operating or other expenses.

If you are in the field of business you have to know and keep on tract of your finances. Here are some tips as your guide to get you started.

You have to document every expenditure and gain for a financial year. You need to write down all non-receipted expenditures and retain receipts as always. You do not need any accounting software. You can do it using journal. Always keep a note of the amount spent or received, source, purpose and date. Business finance is one of the most important aspects of maintaining and running a company. If the business owners do not properly maintain their finances then they will meet problems soon.

You have to keep business and personal finances separately. As a business owner you will need access to both sources especially at difficult times then you do not have any resources to use, you can use your money but make sure you can replace it right away. You can use the money of your company but you have to pay that back.

Setting up proper cash flow is part of business finance. As a business owner you need to determine and make it clear the accounts receivable as well as the accounts payable. Maintain a steady and balanced cash flow to your company. You have to make sure that your accounts payable should not exceed your accounts receivable in a month. Business finance is that business activity which is concerned with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of business enterprises.

This is something most people do not think too much about when starting a business. That is why many businesses fail. Finance is the science of funds management. The general areas of finance are business finance, public finance and personal finance. Finance includes saving money and includes lending money. The field of finance deals with the concepts of money, time and risk. It also deals with how many is spent and budgeted.

It is indeed important to know and have your finance well manage to avoid failures.

Peole who own companies/establishments and organizations utilize the services of a bookkeeper. It is very important to know the rules and regulations of bookkeeping services prior to hiring one for your accounting needs.

Most companies require a bookkeeper and some do their own bookkeeping to save money. Bookkeeping services assist in maintaining a firm’s accounting records by recording the income and expenses, the assets as well as the liabilities in the journal or ledger. Before, bookkeepers used pen and paper. But today,

with the help of the technology that allows for advance software which assists bookkeepers in performing the service. You can use the bookkeeping services through online. These services are becoming increasingly popular nowadays. You can store and access your accounting information on the net. This is ideal for companies with (multiple offices and millions of employees). Before

hiring a professional bookkeeper and lending your journals, you have to invest

igate the background and you have to make sure that all of your expectations will be met. You have to look for services that promise to you that your books will be kept safe.

It is vital to ask for friends, neighbors if they can recommend a good

bookkeeper for you. You have to check his background, investigate the years of service, if you can benefit from their services in this field. Obtain as well their past employment references. You have to determine how much money you are going to pay for the services and if it is worthy to pay for. There are so many bookkeeping services online offer you some promises. It is up to you to choose the perfect one.

Using this kind of service can save you money. Small firms need not to hire full time employees to maintain their journals. You can concentrate on more important aspects of running a successful business. You need not to worry about your journals because someone is doing the work for you and rest assured that your needs and demands will be taken care of by those professionals who are trained to keep your records in order.

Clients start out by asking what they should do with their bookkeeping. They tried doing the bookkeeping themselves for them to save money. Some companies hired bookkeeper but didn’t get things quite right. If you want to be successful in your field you have to know the basics in bookkeeping.

You have to check your hired bookkeeper’s work- If you have bookkeeper in your firm, you have to check his/ her work because no one knows the ins and outs of your firm like you do. Your bookkeeper is doing his/her work but you have to make sure if your bookkeeping is correct. You may find earlier or detect errors if you frequently look at your accounting.

It saves time- Businessmen hire a bookkeeper for them to have a keeper for their records especially those big businesses. Well, it is indeed good for those large firms, but what about those small firms? They can do the bookkeeping themselves, they save money as well as time. But before doing it, you have to know the basics in programming for you not to end up with a mess.

Details/Reports depend on it- if you have an accurate bookkeeping you are able to pull reliable reports from your accounting software.

Through reports you are able to know the accuracy of your tax returns, your decisions, as well as your ability to manage your business.

You need not to have experience or need not to be an expert- if you understand the basic of bookkeeping you need not to be an expert really. Knowing the basics will help you to know how to run your business. Bookkeeping really is a big help to your firm. What are the works of bookkeepers anyway? They are the one who prepare your tax return. Minimize your tax liability by categorizing your expenses. They are doing this to the best of your advantage. Lastly, they keep you informed about options you can make to minimize the tax you have to pay.

If you know the bookkeeping basics, surely you can run your business smoothly and successfully!