Finance & Accounting Outsourcing Service, Payroll Service Provider , Bpo & Tpo Service India ,singap

By Author: Lokesh gandhi
Total Articles: 1
Comment this article

How the Bookkeeping Process works
Many companies in India offer Bookkeeping Services. One may wonder why a simple process is like bookkeeping requires another source. However there is much that goes into the process than anybody can imagine. The flow of money in a company can be bewildering so much so that you may turn to any finance and accounting Services Companyfor help! Bookkeeping helps you keep track of these expenses. Assuranceand advisory serviceswill tell you that going for Bookkeeping services are not a bad option
Typically, a business follows a standard bookkeeping process. Normally, during the course of a business transaction, a document is produced. Examples of these documents are invoices or receipts, which are issued for sales and purchases. Deposit slips are produced when the company deposits money to their bank accounts. Checks are used to pay certain accounts. Below are certain steps on how bookkeeping works
Creating records
The first part of the bookkeeping process involves recording the details of these documents into small business accounting software. Each modual corresponds ...
... to a specific transaction.Credit sales are recorded as accounts receivable, cash payments are recorded in the petty cash account. The transactions are recorded behind the scenes of the accounting software using double-entry bookkeeping. In fact many small business accounting software applications are designed so the input for transactions use forms that are easy for the non-bookkeeper to understand so most people don't even realize that they are performing double-entry bookkeeping.
Reviewing Financial Reports
After a period of time, usually a month, the bookkeeper will run the financial reports for the business. This is the second part of the bookkeeping process.
This process allows the accountant to quickly check if the posting process was done accurately. If an account has a debit balance, the balance amount is posted in the debit column of the trial balance. If an account has a credit balance, the amount is copied into the credit column. The two columns are then totaled. If the two totals are the same, the books are in balance. If the two totals are not the same, an error has been made in either the journals or the posting process. The error must be located and corrected. The totals of the debit and credit column must be recalculated before proceeding. In olden days this would have taken a lot of time however now with the advent of accounting software all this is done in seconds.
If there are no errors, the accountantproduces some adjustments and journal entries and changes the balance in some of the accounts. This produced a listing called the adjusted trial balance – this is still a feature in many of today’s accounting software applications such as QuickBooks Accountant Edition 2011. The altered accounts in this list and their corresponding debit or credit balances are used to make the company’s financial statement.
Preparing Financial Statements
The final step in the bookkeeping process involves preparing the financial statements. The financial statements include the income statement, balance sheet and the statement of cash flows. Although most small business focus on the income statement one need to review all three statements to gain a clear understanding of the operations and financial position of the business.