Any company, whether small or big should perform bookkeeping. It is an important part of why it is important. Bookkeeping is the process of recording and maintaining any type of financial transaction that takes place in any type of institution, company, or business is known as bookkeeping. Bookkeeping services for small businesses are just as important as that for big companies because they need to take care of their expenses too.

Any process that involves writing down a person’s or a company’s expenses and transactions can be known as bookkeeping. Transactions can include purchases, any sort of receipts, the sale of any item, or even payments for any kind of thing.

Bookkeeping services for small business can be done in the form of maintaining a daybook. It is done by a bookkeeper and can be done in a single-entry method or even a double-entry method. This daybook also called a ledger, or a cashbook holds the record of any type of financial interactions that take place. All these records and information are then used by an accountant who can create important documents based on them. These documents may include balance sheets, income tax files, income statements, etc.

bookkeeping services for small business

Methods involved in bookkeeping

There are many methods by which a bookkeeper can maintain records. Let us look at some of the common methods.

  • Single entry method: This is usually used by an individual or a small business/shop owner and doesn’t require any actual training. It is simply a record of every single expense and income that takes place. It is quite easy to maintain and understand.
  • Double-entry: This method is usually practiced by large business owners or those shops that sell on credit. It is known as a double-entry because it follows a rule that all transactions that take place involve two aspects, credits, and debits. This system acts as a double-checking method because in the end the total amount of credits should match the debits.

Systems involved in bookkeeping

After learning about the ways bookkeeping can be done let us look at the ways they can be maintained efficiently.

  • Journals: These are known as the most basic ways of maintaining records. This is where the original entries are done. Every financial interaction taking place, whether it is inflow or outflow of money, it is tracked and recorded here. It can be physical or digital.
  • Ledgers: After the initial journaling of expenses, they are grouped and categorized into various groups such as liabilities, assets, etc. This is the second step of journaling. This is very important as it is used to calculate all financial documents at the end of the year.
  • Cash registers: The simplest way of keeping records is a cash register. The computer registered the amount of cash given as well as the amount that is returned to the customer. It is usually used by small businesses and shop owners.