Book keeping simply means keeping the financial statements of an organisation or firm on a day to day basis. Industries are businesses which would be concerned with making profits and without booking keeping the success or even failure of an industry wouldn’t be known. Therefore virtually all industries require a form of bookkeeping
Importance of bookkeeping
Bookkeeping gives companies a reliable measure of their performance, showing their weaknesses, strength, failures, gains, successes,areas for improvement,and strengthening. It also provides information on general strategic decisions and a benchmark for its revenue and income goals. In short, once a business is up and running, spending extra time and money on maintaining proper records is critical. Thus if an industry or organisation is to deal with money, or what money buys bookkeeping is expedient for that industry and this includes every industry.
With proper bookkeeping, companies are able to track all information on its books to make key operating, investing, and financing decisions.
Cost of bookkeeping
Small companies usually don’t actually hire full-time accountants to work for them because the costs are usually higher. Instead, small companies generally hire a bookkeeper or outsource the job to a professional firm. One important thing to note here is that many people who intend to start a new business sometimes overlook the importance of matters such as keeping records of every penny spent. The gains of bookkeeping definitely outweighs the cost but still a proper form of bookkeeping well suited to an industry or business should be adopted. Learn more.
Forms of bookkeeping
Different forms of bookkeeping exists, and depending on the kind of business endeavour by an industry chooses the one best suited to it. Two popular forms of accounting rule in bookkeeping include: the cash basis of accounting or the accrual basis of accounting. The difference between these types of accounting is that in cash basis you record transaction only when cash is actually received or paid. While in accrual basis you record transaction when it occurs, even if cash is not received or paid.
Components of bookkeeping
This include things which facilitate the practice of bookkeeping. They include;Bookkeepers, cashbooks,bank statements, ledgers, income, and expense account, although this are all major books they are now computerized. A bookkeeperis an individual who manage all financial data for companies. Without bookkeepers, industries would not be aware of their current financial position, as well as the transactions that occur within or outside the industry. Hence the need for only financial experts.
Though, bookkeeping might seem to refer to use of books, to manually record financial dealings of an industry; it is just an illusion, as bookkeeping is highly computerized, even industries that arenot entirely professional in nature use bookkeeping digitally, to run financial checks and records of the industry. Whether it is the digital or manual bookkeeping used it should be noted that bookkeeping is vital, to the viability of any industry. Check out this site: http://bookkeeperco.com.au/bookkeeper/