What Systems And Methods Are Used In Bookkeeping Services? As a business owner, being able to have knowledge of different kinds of bookkeeping systems will help you to decide what kind of system will be more appropriate for your business transactions. 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. When it comes to single entry bookkeeping system, this is perfect for businesses under small scale category. For this type of system, it is primarily used for the purpose of maintaining business transactions related to cash receipt, cash disbursements, sales and purchases. Actually, this system is more of an informal system applicable to small business transactions. Here, what the bookkeeper does is use the system to maintain the day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. When it comes to single entry bookkeeping procedure, only one account is affected by every transaction made. In case of a double entry transaction on the other hand, every transaction would have entry on both accounts.
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If there’s a sale for a certain item, the cash deposit or receipt account only updated with received amount. In a single entry bookkeeping system, the corresponding entry in the sales account will not be created. Hence, it doesn’t provide a complete financial standing of different systems in the business. If you are rooting for a detailed transaction of different systems that are involved in the business transaction, then that is when you should opt 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. And likewise, the bookkeepers should have different debit entries for one credit entry. The company’s financial performance can be ascertained clearly based on accounting details acquired from double entry bookkeeping systems. There are two methods on how bookkeeping is done one of which is manual bookkeeping and the other is computerized bookkeeping. In manual, it’s actually the oldest method of bookkeeping to which the bookkeeper use a journal or ledger book to record different accounting entries that are related to business transactions. In computerized on the other hand, it’s like manual processes but computerized.