What do Bookkeeping Duties Entail
If you are a business owner and have no idea what duties are involved in bookkeeping then don’t worry, you are not alone. It is rather easy to learn and if you find that this area is not your cup of tea then there are actually ways that you can outsource bookkeeping tasks and make it easier for you all around.
Some of the duties of a bookkeeper will include but are not limited to things like:
· Developing a system that will account for all of the financial transactions. This might be by using a chart of the accounts. It will also include defining or laying out the procedures and policies for the system of bookkeeping that is being established.
· Maintenance of subsidiary accounts through verification, allocation and the posting of each of the transactions.
· Balancing these subsidiary accounts by confirming and tallying the entries.
· Maintenance of a general ledger with the transfer of the summaries of those subsidiary accounts.
· Balancing this general ledger with a trail balance and then the reconciliation of the entries.
· Maintenance of historical records in the form of filing all related documents – such as receipts, bills, etc.
· Preparation of financial reports. This will entail collecting and then analyzing and finally summarizing financial trends and information.
· Complying with local, state and federal legal requirements which is achieved by knowing said requirements and then by adherence to said requirements. This can include advising your management team on actions that might be necessary as well as filing specific reports among other things.
One of the terms that you might need a thorough understanding of when it comes to bookkeeping duties will be “single entry bookkeeping”.
In a nutshell, this term refers to a bookkeeping system that relies on maintaining financial information by using an accounting entry that is one sided. While this may not sound like plain English right now, it is rather simple to understand.
See, most of the time a business will need to have a record of every single transaction that is based on what is called the double entry system. That being said, many small business owners do not need that complicated of a system and as a result will rely on this one. This is the absolute bare essentials when it comes to bookkeeping. In fact, many business owners will choose to use only their taxes, accounts payable, accounts receivable and cash records with this system. A professional accountant can turn the information compiled with this type of system into a statement of affairs or income statement.
That still might leave some clueless though, so let’s break it down farther.
With a single entry system, there will be two columns. One column will be for debits while the other will be for credits. When you have a transaction to record, if it applies to money going out then it will be entered into the debit column. If the transaction regards incoming funds, it will be recorded on the credit side. This can be easy to understand because it is essentially like a souped up version of a checkbook register.
As with anything, this method has its advantages and disadvantages.
Advantages
This is an elegantly simple system of keeping records. Also, this method tends to be less expensive to use when compared to the double entry system simply because a greater expertise is required in order to effectively utilize the double entry system.
The single entry bookkeeping system is used to record the income flow as well as the expenses of a business by:
· Maintaining a summary of receipts daily
· Maintaining monthly summaries for disbursements and cash receipts
Disadvantages
When you are using this type of system to do your bookkeeping you may run into the following:
· Theft or other types of losses will be harder to detect
· Financial information might not be readily available to the management of the company so that they can make effective business strategies and effectively control the business
· Lacking a precise and systematic system for bookkeeping can lead to administration that is inefficient as well as control over business affairs that is limited
Now that you know what types of duties are performed by a bookkeeper and the definition, advantages and disadvantages of the single entry system, you might be ready to learn about financial coaching – not to be confused with financial advising.
Financial coaches don’t sell financial products, insurance or even investments. The purpose of a financial coach is to educate you about both your situation and what you need to do in an effort to meet the financial goals of your business.
If you have trouble with numbers or are at a place where you need help with the understanding of how to get your business where you want it to be then this is the time to call a financial coach.