Bookkeeping

Bookkeeping involves the recordation of basic business transactions in a recordkeeping system. In essence, the term implies that an individual is tasked with the most common ongoing accounting transactions; more complex transactions are reserved for those with more advanced accounting training.

The more high-volume bookkeeping tasks include the recordation of supplier invoices and cash receipts, and the preparation of customer invoices and the processing of payroll. Given the high volumes of these activities, procedures can be developed to standardize the processing of bookkeeping transactions to a considerable extent. The term may also be applied to a number of operational tasks, such as paying supplier invoices, remitting sales taxes, and preparing government reports.

Besides recording transactions and engaging in operational activities, a bookkeeper can also construct preliminary financial statements, but typically relies upon an accountant to create final financial statements. The bookkeeper is also responsible for the proper filing of supporting documents, so that the evidence for any transaction can be easily found.

Bookkeeping requires a basic knowledge of accounting, but not an accounting degree. Instead, bookkeepers can become quite proficient with hands-on training and a modest amount of accounting knowledge.

Bookkeeping can also be defined by what it is not, which includes any of the more advanced one-time journal entries to account for unusual events, as well as the preparation of more detailed accounting schedules. These advanced accounting tasks are needed to refine the financial statements to accurately reflect the results, financial position, and cash flows of an organization - tasks for which a bookkeeper is not trained.