Chapter 1
Bookkeeping Basics
What Is Bookkeeping?
Bookkeeping is how you record and report on the financial transactions of a business. The bookkeeper is responsible for initially recording basic accounting transactions, such as issuing invoices to customers, recording cash receipts, and paying employees. Bookkeeping is rarely conducted entirely on paper anymore. Instead, the bookkeeper uses a low-end accounting software package to record transactions. The software makes it easier to record transactions, and also summarizes the information into financial reports that are useful to the owners of the business to see how it is operating.
What Is the Job Description of a Bookkeeper?
The following is a detailed description of the tasks for which a bookkeeper is responsible. These line items may vary somewhat for companies located in specialized industries, but the description covers the bulk of all bookkeeper activities.
Basic Function
The bookkeeper position creates financial transactions and creates financial reports from that information. The creation of financial transactions includes posting information to accounting journals or accounting software from such source documents as invoices to customers, cash receipts, and supplier invoices. The bookkeeper also reconciles accounts to ensure their accuracy.
Principal Accountabilities
- Purchase supplies and equipment as authorized by management.
- Monitor office supply levels and reorder as necessary.
- Tag and monitor fixed assets.
