Bookkeeping is the process of recording and organizing all financial transactions of a business or organization. It is a fundamental part of the accounting process that involves systematically documenting purchases, sales, receipts, payments, and other financial events on a daily basis
. Key aspects of bookkeeping include:
- Recording transactions using source documents such as invoices, receipts, and bank statements
- Maintaining organized records in journals or ledgers, either manually or with bookkeeping software
- Using methods like single-entry bookkeeping (recording each transaction once) or double-entry bookkeeping (recording transactions in two accounts to maintain balance)
- Preparing financial reports such as balance sheets, income statements, and cash flow reports based on the recorded data
- Reconciling accounts by comparing recorded transactions with bank statements to ensure accuracy
The person responsible for bookkeeping is called a bookkeeper, who ensures that financial data is accurately captured and organized to support accounting, tax preparation, and business decision-making
. In summary, bookkeeping is the administrative process of tracking a business’s financial activities to provide a clear and accurate record of its financial position and performance
