25 Watline Ave,
Mississauga, On, Canada
L4Z 2Z1
Bookkeeping- Watterson Financial Solutions Inc
Introduction
Bookkeeping is the process of recording all financial transactions made by a business. Bookkeepers are responsible for recording, classifying and organizing every financial transaction that is made through the course of business operations. Bookkeeping is not accounting, these two are different. The accounting process uses the information recorded by the bookkeeper to prepare various statements, like, Income tax preparation and Financial statements.
Small businesses may choose a simple bookkeeping system, such as a spread sheet to record each financial transaction that happened during the course. Businesses that have more complex financial transactions usually choose to use the double-entry accounting process like software or SAAS based platforms available in the market.
What is Bookkeeping?
Bookkeeping is the process of recording every financial transaction made by a business from the opening transaction to the last transaction when a business closes. Each financial transaction should be recorded based on supporting documentation. That documentation may be a receipt, an invoice, a purchase order, or some similar type of financial record showing that the transaction took place.
The bookkeeping transactions can be recorded by hand in a journal or using a program like a Microsoft Excel Spreadsheet. Most businesses now use a specialized bookkeeping computer program to keep track of all financial transactions. Bookkeepers can use either single-entry or double-entry bookkeeping to record financial transactions. Bookkeepers should be familiar with the chart of accounts and how to use debits and credits to balance the books for each business client in their portfolio.
The bookkeeping process should allow for a clear picture of all transactions made by the firm during the fiscal year for income tax purposes and the accurate preparation of financial statements by the firm's accountant.
How Is Bookkeeping Differ From Accounting?
Bookkeeping for a business is a critical function of the overall accounting function. A bookkeeper collects the documentation for each financial transaction, records the transactions, classifies each transaction as a debit or a credit, and organizes the transactions according to the business's chart of accounts.
When the financial transactions are all recorded, they have to be summarized at the end of specific time periods. Some larger businesses may require quarterly reports, while smaller businesses may require reports only at the end of the year in preparation for completing business taxes.
When it is time to prepare reports and financial statements, the accountant then takes the information, analyzes, reviews and interprets the information to complete quarterly/yearly reports and financial statements. The year-end reports prepared by the accountant must be compliant to the standards established by the Financial Accounting Standards Board (FASB). These rules are called Generally Accepted Accounting Principles (GAAP).
To know more feel free to contact us at robert@wattersonfinancial.com or call us at 6474035381
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With several years of experience, Watterson Financial Solutions Inc is a leading accounting firm in Mississauga, Ontario. Our services include personal tax planning, business registration, business setup and consulting, bookkeeping and accounting, payroll, WSIB, HST, corporate tax, assurance, disability tax credit program, budgeting and forecasting services, insurance, mortgages, investments, real estate and legal services, business valuation services, estate planning services, litigation support and damage quantification services.
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