From the moment a sale is made, the cycles of business bookkeeping begin. Originally, bookkeeping was done with a “one-write” method. Bookkeepers would do business bookkeeping by simply maintaining a ledger that listed expenses, cash received from transactions and other business-related functions in a cash-in/cash-out method. Payroll was generally kept in a separate ledger. Each day, bookkeepers would do bookkeeping according to the volume of daily transactions. The problem with manual one-write systems was that it was time-consuming and often somewhat disconcerting to reconcile. Bookkeepers posted initial cash flow balances and then made deductions from the payables side of the ledger or credited the receivables side of the ledger.
By the end of the late 1940s, it became easier to do business bookkeeping as a result of more sophisticated office equipment which made it simple to reconcile the “books”, as they used to be called. The appearance of state-of-the-art computer software in the early 1980s was a virtual blessing for bookkeepers. It not only took care of tedious calculations and cumulative balances, but also prepared management reports based upon daily postings.
Today’s business bookkeeping software is efficient, easier to use and is highly interactive, with payroll and inventory control modules. Bookkeepers who do business bookkeeping with current software can add, delete or change any information on clients and vendors in a database format which is interactive with other modules. Thus, any changes to addresses or other information is retained for all future postings. Another feature of business bookkeeping software is the ability to see each vendor or client’s transaction history with a simple click of the computer mouse. This makes the job of business bookkeeping less complicated, while the margin for error in reconciliations is greatly decreased.
To do business bookkeeping, a routine should be set up for daily posting. This is especially true if your company has a high volume of transactions. Each transaction should be posted with care and accuracy to insure best final reporting results. In small businesses, it may be a matter of a part-time business bookkeeper. Or, if transactions are minimal, bookkeeping can be outsourced. It may be necessary to maintain a separate department exclusively dedicated to business bookkeeping if the volume of transactions are high or more complex.
Business bookkeeping is the first step in business accounting. Accounting generally requires a thorough knowledge of specifics of cost accounting, internal accounting and tax reporting. However, bookkeeping is singularly important in terms of providing initial information about business transactions.