Bookkeeping is the process of identifying, measuring, recording, and communicating economic information about an organization or other entity, in order to permit informed judgments by the users of the information. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. Proper bookkeeping should also reveal the nature and value of the assets and liabilities of a firm, as well as its net worth at the close of any period.
Bookkeeping is the first step in the accounting process, which includes classifying, reporting, and analyzing financial data. Bookkeepers are responsible for organizing and tracking receipts, cancelled checks, and other records generated by financial transactions. All bookkeepers chronologically record all transactions. Such as cash disbursements, cash receipts, sales, and purchases. All of this information is put together and used to prepare monthly financial statements.
With good record keeping you avoid many problems with your finances. One of the biggest ones are if you get audited with good record keeping you can avoid fines and penalties.
For more information, please Contact Us and one of our professional bookkeepers will assist you in your questions.
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