In terms of making a living, the human population can be easily divided into two classes, one who owns a business and the other one is who works for a business. Any kind of financial transaction that happens has its link to some form of business. For example, salary credit happens when the business one is working for sending due payment for the job done.
In simple terms, a business is earning money by buying or producing any kind of products and selling them at a comparatively higher price. Business involves not only buying and selling of products but also selling of various services.
In the modern world, business has evolved into multiple complex categories. Amongst these business-types bifurcations, small businesses can be readily deemed as the easiest one.
As one gets involved in a business, it is imperative that the account of money coming in and flowing out forms the most integral part of running a business. The written records of these financial transactions happening in a business are known as bookkeeping.
Bookkeeping is done not only as part of small businesses but also in major organizations. The person who is responsible for bookkeeping is called the bookkeeper.
Proper bookkeeping is the key to run a business seamlessly
Bookkeeping has existed in human society since the prehistoric era. The earliest form of bookkeeping has been found in ancient Babylon dated around 2600 BC. Colonial America also witnessed a form of bookkeeping known by the name of a waste book, where the rough entries of daily transactions were kept in these waste books for updating their fair copies in ledgers or daybooks.
As the world evolved, bookkeeping also changed its structure. One can see bookkeeping services here on the internet and understand their various available features. However, despite its various changes and brand new features, its basic two types would never cease to exist:
• Single Entry: As the name suggests, this type involves the cash flow (both in and out) only for a single account.
• Double Entry: In this type of bookkeeping, the cash flow is maintained for two different sources to gain a better understanding of the expenses and earnings. For example, an entry of two dollars as an expense for one account should have an entry to the same two dollars as earning for another account.
Bookkeeping is not a mere record of expense and earnings for a business. It is considered as the mirror that shows the business performance pointing out the areas of strength and weakness for the business.
As digitization has seeped into our lives, bookkeeping is not left behind as well. Online bookkeeping services help businesses in many ways like going paperless bookkeeping, accessing accounts anytime anywhere, dealing with real-time data, etc.
Besides the flurry of these services that this online bookkeeping provides, they also provide dedicated support customized for a particular business to ensure their smooth and seamless running. Whatever technologically advanced bookkeeping methods one might use, it is always advised to have a personal intervention now and then about the expenses and earnings.