What is bookkeeping and what do bookkeepers do?

 Why bookkeeping and a bookkeeper is important

Bookkeeping is the process of recording, classifying and tracking every financial transaction in your business. This means as a business owner you’ll be able to see what you spend, where you’re spending it, what are your profits and where are your losses.

You will know exactly how much you spend and how much you are receiving in your business. These tasks were performed by a bookkeeper using books and ledgers to record the transactions, and that’s where the name bookkeeping comes from. 

Transactions used to be written in daybooks, cash books or journals and journals and then transferred to the general ledger.

Later spreadsheets were used as computers became more common and accessible. 

Now bookkeeping software like Quickbbooks Online, Xero and Sage Accounting have replaced spreadsheets and they offer many advantages that save you time and money. 

Bookkeeping and accounting software streamline your financial record keeping, while giving you an overview of your business. It shows you the profits and losses, expenses and also provides you with weekly, monthly and annual financial reports for tax purposes.

The bookkeeper starts with recording the source documents, which is just another word for your slips, invoiced, receipts; it is the proof of all the financial transactions in your company. These documents get recorded under the right accounts like expenses or deposits. 

Essentially your bookkeeper is responsible for recording the flow of money in and out of your company based on the information that only you as the owner can provide.