What Systems And Methods Are Used In Bookkeeping Services? Being able to have knowledge on the different kinds of bookkeeping systems can help to decide what system is more appropriate for your business transactions, which is vital for any business owners. Well the truth is, there are 2 kinds of bookkeeping systems that are being used nowadays and these include Double Entry Bookkeeping systems and Single Entry Bookkeeping systems. In a single entry bookkeeping system, this is ideal for businesses that are under small scale category. This kind of system is used for maintaining record of business transactions that’s related to cash receipt, cash disbursements, sales and purchases. Well the truth is, this system is more of an informal system perfect for small business transactions. For this, what the bookkeeper does is to make use of the system in order to maintain day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. In single entry bookkeeping procedure, every single transaction affects just one account. As for double entry transaction however, each transaction will receive an entry for both accounts.
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Say for example that there is a sale for certain item, then the cash deposit or receipt account is updated only with received amount. The corresponding entry in sales account will not be made in a single entry bookkeeping system. Hence, it is not providing complete financial standing of different systems in the business. If you want a more detailed transaction for different systems that are used in the business transaction, then that’s the time you must go for double entry system.
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In double entry bookkeeping system, this is a bookkeeping system that is used typically by accountant or bookkeeper in any business. This system is used to be able complete accounting details of transactions made by the business and also, introducing the concept of credit and debit. Due to the reason that there are multiple accounting systems implemented in a business, debit entry in among the accounting systems would be accompanied by credit entry in a different accounting system or perhaps, in more than one accounting system. Similarly, the bookkeepers need to make various debit entries for one credit entry. The company’s financial performance may be ascertained based on the accounting details obtained from double entry bookkeeping systems. There are 2 ways to do bookkeeping one of which is manual bookkeeping and the other is computerized bookkeeping. In manual bookkeeping, the bookkeeper makes use of journal or ledger book to be able to record different accounting entries that are related to business transactions. In computerized on the other hand, it’s like manual processes but computerized.