What is Bookkeeping?
Bookkeeping is the action of recording a company's financial transactions to maintain accurate financial records, so businesses can make critical decisions about operations, investments, and financing. Bookkeeping is completed by bookkeepers, who are hired specifically to oversee some or all a business’ general ledger accounts, depending on the size of the organization. All transactions by the business are logged as debits and credits.
Bookkeepers are responsible for gathering information from purchases, verifying receipts, and balancing the books. Other duties include bank reconciliation - comparing the books to bank statements and other source documents to ensure that the books are accurate and up to date, and monthly financial reports that summarise the company’s financial position. Some bookkeeping also includes:
- Creation and distribution of invoices
- Collection of unpaid bills
- Making sure that suppliers' invoices are paid on time
- Managing the payroll and employee deductions
- Preparing and filing tax returns
- Helping to create annual profit and loss statements and balance sheets
- Budgeting and forecasting