It is important to record all these transactions and account for the use or management of any resources concerned with the business company.Book keeping is basically the process of recording the transactions that occur within the business and it is also the part of accounting process as well.
The business will need to know where to invest or improve on in order to grow financially and also maybe increase the sales and keep the company growing economically.For any business to grow, it is not always good to underestimate the purpose of book keeping since it plays a major role in the running of any business oriented organization.Book keeping is a complicated process that requires a professional to do the work.
The process of book keeping is important for any kind of business in the market that would wish to grow and prosper.A professional book keeping is also very important since it helps in completing inventory system and reconciliation.
The process of book keeping is not always done by any other person but it is always a requirement that a person has the skills of book keeping and has the experience.The work of a book keeper is very crucial and it is important to hire a book keeper who is qualifies and skilled so that the bookkeeper is able to minimize the errors that might occur in keeping the records.
It is the work of a book keeper to bring the books into the trial balance stage so that it enables the accountant to now make the balance sheets and income statements for the business to track its financial position at the end of each year or at the end of every month depending on the period it usually works it out.
It is a process that should be followed to the latter in order to avoid mismanagement of the business and also reduce the risks that the business could be exposed leading to a loss by the business rather that making huge profits.In any business, it is always the case that in any transaction that occurs then there must exist a document that shows that the transaction truly occurred and there is a prove of it been done.
A book keeper should be able to record all these statements in one book that can be easily related or referred to in case any reference might need to be done. Totaling enables the records to give the summary of that particular period of the business operation. This process where the summaries are being transferred to the respective ledgers is called posting.
The book keeper should make sure that the accounts both balances so that the accountant can just make adjustments and changes that might be necessary in some amounts of the accounts. The income statement is also known as the profit and loss account or the statement of financial result of a given company.Another type of financial statement is the statement of financial position also known as the balance sheet.