Bookkeeping

Bookkeeping is the process of recording, organizing, and maintaining financial transactions for a business or individual. It involves tracking all financial activities, such as sales, purchases, receipts, and payments, and ensuring that these transactions are accurately documented in the company’s financial records.

The main goal of bookkeeping is to ensure that a business’s financial data is accurate, up-to-date, and organized, which helps in making informed business decisions and preparing for taxes or audits. Bookkeeping can be done manually, using paper and ledgers, or through accounting software.

Key tasks in bookkeeping include:

1. Recording financial transactions: Tracking all money coming in and going out.
2. Classifying transactions: Categorizing each transaction (e.g., income, expenses, liabilities).
3. Reconciling accounts: Ensuring the accuracy of financial records by comparing them with bank statements.
4. Preparing financial statements: Creating reports like income statements, balance sheets, and cash flow statements to summarize the financial health of the business.

Bookkeeping is an essential part of accounting, although accounting is broader and includes analysis, reporting, and interpretation of financial data.