What is Book Keeping?
Bookkeeping is a method of recording all the monetary transactions made through a business. It ensures that archives of every and each and every monetary transaction are correct, up to date and complete. Accounts of a commercial enterprise are organized from the data supplied with the aid of a bookkeeping process.
Each transaction climate is a query about purchase, price or sale, should be recorded. An agency or commercial enterprise entity ought to hold the books of accounts. It is an obligatory compliance which wishes to be followed. Proper bookkeeping offers agencies a dependable measure of their performance. It additionally offers statistics to make established strategic choices and a benchmark for its income and profits goals. The bookkeeping transactions can be recorded by hand in a journal or spreadsheet like Microsoft Excel or a superior software like Tally.
Utilities of Bookkeeping
Easy to Plan
Once the entity has targeted recording and overview of their transactions. It is a lot less difficulty to layout and predict the future of the entity. With an overview, you can predict the future possibilities and recognize the income and loss of the entity.
Detailed Recording
Bookkeeping helps the entity to maintain the distinctive and up-to-date recording of the transactions, such as sales, expenses, purchases, advances, mortgage payments, etc. which helps to get the whole financial announcement of the entity.
Compliant with the Law
In India, The Registrar of Companies (ROC) needs a strict file of accounting transactions in a company. Hence, bookkeeping is obligatory using the law.
Quicker Financial Analysis
It’s beneficial to understand that by means of having exact documents, you will limit the amount of time an accountant will spend on analysing the debts and developing financial statements for your firm.
