What Work These Accounting And Bookkeeping Departments Do?
Topics: accounting principles, principles of accounting, finance, accounts, GAAP
People assume both bookkeeping and accounting are one and the same. In reality both differs. Bookkeeping is a function of accounting while accounting includes many tasks involved in managing the financial affairs of a business. Any income statements or financial records are initially prepared by bookkeepers and then it is given to accountants for the corrections and final approval.
Bookkeepers carry out all manner of record-keeping tasks. Some of them contain the following:
They set up source documents for all the process of a business - the buying, selling, transferring, paying and collecting. The documents consist of papers like purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also enter financial effects of the transactions and other business events. Those contain making sales buying products, borrowing money or raw materials for production.
Bookkeepers also make entries of the financial consequences into journals and accounts.
These are two different things. A journal is the record of transactions in chronological order. An account is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
Bookkeepers set up reports at the end of definite period of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to make sure that they are as error-free as possible.
The bookkeepers also gather entire listings of all accounts. This is called the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts. The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.
Well, Payroll is a terribly important thing that they do in both accounting and bookkeeping departments. They record all the salaries and taxes earned and paid by every employee in every pay period. Federal, state and local taxes has to be deducted appropriately so, the payroll department has to take care of this. These taxes are recorded in the pay stub attached to your paycheck. Income tax, social security taxes paid, employment taxes that have to be paid to federal and state government are also included. Retirement, vacation, sick pay or medical benefits are the personal ones which are included in the other deductions. It is a critical function.
The accounting department collects and reports any payments or cash received from customers of the business or service. The accounting department has to make sure that the money is sourced precisely and deposited in the suitable accounts. They also supervise where the money goes; how much of it is kept on-hand for areas like payroll, or how much of it goes out to pay what the company owes its banks, vendors and other obligations.
On the other hand cash disbursements are key area of the receivables business. A company writes many checks throughout the course of year to pay for purchases, supplies, salaries and taxes. The accounting department plans all these checks and records to whom they were disbursed, how much and for what. Accounting departments also record purchase orders located for inventory, like products that will be sold to customers or clients. They also record assets like business’s property and equipment.
Ranju the associate editor of www.accountingsecret.com . This site is dedicated to give you valuable insider secrets revealed by professional Accountants. This complete accounting resource is aimed to serve the interest of owners, bankers, shareholders, agencies and governments.
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