Be it for contracted services, licenses and government approvals, incoming cash flow from rent collections or any number of other variables, the movement of money is hardly stagnant. Put simply, the barrier to entry for those seeking to make a lateral career shift — or a complete overhaul of their current professional trajectory — has never been lower. With a little guidance, some training and a determination to put oneself out there, bookkeeping could quickly become the ultimate “drag, drop and click” side hustle. With a history dating back nearly 7,000 years, to the ancient landscapes of Mesopotamia, the tracking and categorization of financial records is not a novel concept, per se.
However, knowing the differences between bookkeeping and accountancy will help you have more control over your finances. Whether you do the bookkeeping yourself or hire someone to do it, certain elements are fundamental to properly what is bookkeeping maintaining the books. Some of these elements are done more regularly than others to ensure that the books are always up to date. Other elements are completed at certain time periods as necessary to complete a business task.
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Staying on top of your bookkeeping is important so that you don’t have unexpected realizations about account balances and expenses. We’ve put together this guide to help you understand the basics of small business bookkeeping. Some of the key tasks for accountants include tax return preparation, conducting routine reviews of various financial statements, and performing account analysis. Another key responsibility for accountants includes conducting routine audits to ensure that statements and the books are following ethical and industry standards. Bookkeepers don’t need a special certification, but a good bookkeeper is important for an accountant to have accurate financial records. That’s why it’s so important to understand the nuances between bookkeeping and accounting.
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Any miscalculated or wrongly-transcribed journal entry in the ledger can cause an incorrect trial balance. It is best to look out for errors early, and correct them on the ledger instead of waiting for the trial balance at the end of the fiscal year. Recording transactions begins with source documents like purchase and sales orders, bills, invoices, and cash register tapes.