Systems Used In Bookkeeping Services
For any business owner out there, it is integral to have knowledge on different bookkeeping systems used to decide which system is more applicable for your business transactions. Well the truth is, there are 2 kinds of bookkeeping systems that are being used nowadays and these include Double Entry Bookkeeping systems and Single Entry Bookkeeping systems.
When it comes to single entry bookkeeping system, this is perfect for businesses under small scale category. This kind of system is used for maintaining record of business transactions that’s related to cash receipt, cash disbursements, sales and purchases. Well the truth is, this system is more of an informal system perfect for small business transactions.
For this, what the bookkeeper does is to make use of the system in order to maintain day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. In single entry bookkeeping procedure, every single transaction affects just one account. In case of a double entry transaction on the other hand, every transaction would have entry on both accounts.
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The cash deposit or receipt account only be updated with received amount if there’s a sale for certain item. The corresponding entry in sales account will not be made in a single entry bookkeeping system. Hence, it is not providing complete financial standing of different systems in the business. If you want a more detailed transaction for different systems that are used in the business transaction, then that’s the time you must go for double entry system.
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Now in double entry bookkeeping system, it is a type of bookkeeping system that is typically used by an accountant or bookkeeper in any business. This system is mostly used to complete the accounting details of transactions that are made by the business and at the same time, to introduce the concept of credit and debit. Mainly because of the reason that there are a number of accounting systems used in bigger businesses, debit entry is one of those accounting systems that’ll be accompanied by a credit entry but in different accounting system or perhaps, in more than one accounting system. Similarly, the bookkeepers need to make various debit entries for one credit entry. The financial performance of the company may be ascertained clearly based on acquired accounting details from double entry bookkeeping systems.
There are two methods on how bookkeeping is done one of which is manual bookkeeping and the other is computerized bookkeeping. In manual bookkeeping, the bookkeeper makes use of journal or ledger book to be able to record different accounting entries that are related to business transactions. In computerized on the other hand, it’s like manual processes but computerized.