Bookkeeping involves systematically recording all financial transactions of a business, individual, or other entity. It involves entering all transactions, like sales, purchases, and expenses, into a system or software that helps keep track of these transactions. These transactions are recorded in different accounts, such as assets, liabilities, equity, revenue, and expenses. These accounts form the basis of the company's financial statements. A key part of bookkeeping is balancing the books, ensuring that the sum of debits equals the sum of credits for each account. This is achieved by posting transactions to the general ledger and reconciling the accounts periodically.
Our bookkeeping and cleanup service will cover:
Reconciling Bank Statements: They ensure that the company's internal financial records match bank statements..
Preparing Trial Balance: Some bookkeepers may also prepare financial statements regularly throughout the year, not just at the end of the financial period.
The year-end trial balance is a list of all accounts and their balances at the end of the fiscal year, after all the transactions for that year have been recorded. The purpose of the trial balance is to ensure that the total of all debits equals the total of all credits, confirming that all entries were made correctly in double-entry bookkeeping. If there is a discrepancy, it indicates an error in the bookkeeping that needs to be investigated and corrected. The trial balance is a preliminary bookkeeping check before preparing the financial statements.