Accounting is what you do with those records. What’s the difference between bookkeeping and accounting?īookkeeping makes accounting possible-it’s the act of recording your financial transactions. When your transactions are up-to-date, you’re able to create accurate financial reports that measure your performance and help you make adjustments when necessary. The purpose of bookkeeping is to keep your financial records up-to-date. Reconciliation is done at the end of every month. Reconciliation: Reconciliation is process of matching transactions entered into your records with the corresponding bank or credit card statements.(Expense) rent paid, $1,500 (money went to the rent expense account).(Income) sales revenue, $2,400 (money came from customer).Categorization: Your income and expenses need to be categorized according to where the money is coming from or going to and why.Recording of transactions: For freelancers, income and expenses are their most relevant recorded transactions.The key components of bookkeeping, whether you’re a freelancer or a multinational corporation, are always the same: (Fun fact, it’s also the only word in the English language (besides bookkeeper) with three consecutive double letters.) Modern professions call for modern bookkeeping solutions What is bookkeeping?īookkeeping is the process of recording your professional financial transactions and the techniques you use to record these business transactions.
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