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Types Of Bookkeeping Services
For any business owner out there, it is integral to have knowledge on different bookkeeping systems used to decide which system is more applicable for your business transactions. Well the truth is, there are 2 kinds of bookkeeping systems that are being used nowadays and these include Double Entry Bookkeeping systems and Single Entry Bookkeeping systems.
For businesses that fall under the small scale category, then it will be ideal to use a single entry bookkeeping system. This kind of system is used for maintaining record of business transactions that’s related to cash receipt, cash disbursements, sales and purchases. Well the truth is, this system is more of an informal system perfect for small business transactions.
Here, what the bookkeeper does is use the system to maintain the day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. Every single transaction affects just one account in a single entry bookkeeping procedure. As for double entry transaction however, each transaction will receive an entry for both accounts.
Looking On The Bright Side of Bookkeeping
If there’s a sale for a certain item, the cash deposit or receipt account only updated with received amount. In a single entry bookkeeping system, the corresponding entry in the sales account will not be created. Hence, it doesn’t provide a complete financial standing of different systems in the business. If you are rooting for a detailed transaction of different systems that are involved in the business transaction, then that is when you should opt for double entry system.
Practical and Helpful Tips: Bookkeepers
In regards to double entry bookkeeping system, this is a kind of bookkeeping system that is mostly used by accountants or bookkeepers in a business. This system is used to be able complete accounting details of transactions made by the business and also, introducing the concept of credit and debit. Due to the reason that there are multiple accounting systems implemented in a business, debit entry in among the accounting systems would be accompanied by credit entry in a different accounting system or perhaps, in more than one accounting system. And likewise, the bookkeepers should have different debit entries for one credit entry. The company’s financial performance can be ascertained clearly based on accounting details acquired from double entry bookkeeping systems.
Manual bookkeeping and the other is computerized bookkeeping are basically the two methods of how bookkeeping is done. Manual as what the name suggests is the oldest method of bookkeeping in which the bookkeeper uses a journal or ledger book in recording different accounting entries that are related to business transactions. On the other hand, computerized bookkeeping does the same thing in manual processes only here, it’s computerized.