Charting Your Course With Great Bookkeeping

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Charting Your Course With Great Bookkeeping

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By : Ike Ani 29 or more times read

Submitted 2010-02-22 16:03:23

When the exact longitude and latitude from the ship are known it is feasible for the captain to chart an accurate course across rough seas. The basic manager of a company is like a ship’s captain. Knowing your location and direction is fundamental for charting the right course in sailing and in business.

The charts for a company are its earnings statement and balance sheet. A good general manager uses these to know exactly where the business is and where it's headed. Armed with this info, better business decisions are a lot more likely. A competent bookkeeper provides these reports accurately and in a timely fashion.

It is the job of the bookkeeper to accurately state the condition from the business in a real time basis. The bookkeeper records all changes within the financials of a company using a double entry accounting system based on the fact that Assets = Liabilities + Owner Equity. All business transactions are accounted for using this system.

Some fundamental tools from the bookkeeper are:

* Ledgers such as accounts receivable, accounts payable, fixed assets
* Journals for recording every financial transaction
* Vouchers such as checks and numbered bills for services or material
* Invoices representing sales of products or services
* Journal entries (recurring and special)
* Trial Balances for interim reporting
* Financial Statements beginning with the income statement and balance sheet

Four essential features of competent bookkeeping are:

1. Timeliness: It’s usually essential to record transactions on a timely basis. This means that invoices and bills are posted by the next company day. Nevertheless, on some instances similar transactions are processed in batches.
2. Account Reconciliations: It’s also critically essential for accounts to be reconciled monthly to assure accuracy. For the cash to become right, for example, check books should be reconciled to the bank statements and outstanding checks must be identified.
3. Analyzing Accounts: For payables and receivables, it is important to know the age from the bills and invoices. How much is "current" and "overdue" is basic to staying on top of the credit rating and vendor relations. For receivables it is important to know how you're doing in collecting funds from each of the customers.
4. Matching: Revenues in a fiscal period should be matched to expenses incurred in that same period. When items don’t match in the same period, inaccurate earnings statements are the result. This leads the basic manger to miscalculate the direction of the company.

Great bookkeeping is the foundation of great accounting. It is also fundamental to assist the general manager steer the business via rough seas and into calm waters.

Author Resource:- For more information on the above topic, check out my site Online Bookkeeping Courses at http://www.onlinebookkeepingcourses.info

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<!DOCTYPE HTML PUBLIC '-//W3C//DTD HTML 4.01 Transitional//EN' 'http://www.w3.org/TR/html4/loose.dtd'>; <html><head><title>Article2008.com | Charting Your Course With Great Bookkeeping</title></head><body><h3>Charting Your Course With Great Bookkeeping</h3> By: Ike Ani When the exact longitude and latitude from the ship are known it is feasible for the captain to chart an accurate course across rough seas. The basic manager of a company is like a ship’s captain. Knowing your location and direction is fundamental for charting the right course in sailing and in business. The charts for a company are its earnings statement and balance sheet. A good general manager uses these to know exactly where the business is and where it's headed. Armed with this info, better business decisions are a lot more likely. A competent bookkeeper provides these reports accurately and in a timely fashion. It is the job of the bookkeeper to accurately state the condition from the business in a real time basis. The bookkeeper records all changes within the financials of a company using a double entry accounting system based on the fact that Assets = Liabilities + Owner Equity. All business transactions are accounted for using this system. Some fundamental tools from the bookkeeper are: <ul> <li>Ledgers such as accounts receivable, accounts payable, fixed assets</li> <li>Journals for recording every financial transaction</li> <li>Vouchers such as checks and numbered bills for services or material</li> <li>Invoices representing sales of products or services</li> <li>Journal entries (recurring and special)</li> <li>Trial Balances for interim reporting</li> <li>Financial Statements beginning with the income statement and balance sheet</li> </ul> Four essential features of competent bookkeeping are: <ol> <li>Timeliness: It’s usually essential to record transactions on a timely basis. This means that invoices and bills are posted by the next company day. Nevertheless, on some instances similar transactions are processed in batches.</li> <li>Account Reconciliations: It’s also critically essential for accounts to be reconciled monthly to assure accuracy. For the cash to become right, for example, check books should be reconciled to the bank statements and outstanding checks must be identified.</li> <li>Analyzing Accounts: For payables and receivables, it is important to know the age from the bills and invoices. How much is "current" and "overdue" is basic to staying on top of the credit rating and vendor relations. For receivables it is important to know how you're doing in collecting funds from each of the customers.</li> <li>Matching: Revenues in a fiscal period should be matched to expenses incurred in that same period. When items don’t match in the same period, inaccurate earnings statements are the result. This leads the basic manger to miscalculate the direction of the company.</li> </ol> Great bookkeeping is the foundation of great accounting. It is also fundamental to assist the general manager steer the business via rough seas and into calm waters. Author Resource:-> For more information on the above topic, check out my site <a href="http://www.onlinebookkeepingcourses.info/">Online Bookkeeping Courses</a> at <a href="http://www.onlinebookkeepingcourses.info" target="_blank">http://www.onlinebookkeepingcourses.info</a> Article From <a href='http://article2008.com/'>Article2008.com</a> </body></html>

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