Different Types And Strategies Of Bookkeeping Systems

Different Types And Strategies Of Bookkeeping Systems

As an owner of a recently started enterprise venture, knowledge on the completely different types of bookkeeping systems shall be able that can assist you in deciding the type of bookkeeping system that you would choose for what you are promoting transactions. You could also get info associated to the totally different strategies of book keeping being adopted globally. There are actually types of book keeping systems namely Single Entry Bookkeeping systems and Double Entry Bookkeeping systems.

Single entry bookkeeping systems. If the type of Business that you have just started falls under the small scale category, single entry book keeping system would be very useful. This type of system maintains a record of the enterprise transactions associated to cash disbursement, cash receipt, purchases and sales. This type of system is more of a casual system suitable for small enterprise transactions. The bookkeeper will usually use this system to take care of a day by day summary of the cash receipts and money payments and likewise a monthly abstract of the cash receipts and payments. In a single entry book keeping procedure, each transaction will have an effect on only one account. Within the case of a double entry transaction, every transaction would have an entry on each the accounts.

If there's a sale of a particular item, the money receipt or cash deposit account only be updated with the quantity received. The corresponding entry in a sales account won't be made in single entry bookkeeping system.

Therefore it doesn't provide the complete financial standing of the various systems within the business. In order for you an in depth accounting of the completely different systems concerned in business transactions, you could possibly opt for a double entry system.

Double entry bookkeeping system. This is the type of system that's most commonly utilized by the bookkeeper or an accountant in any business organization. This system is used by the bookkeeper to keep full accounting details of the business transactions. This system also introduces the concept of debit and credit. As there are numerous accounting systems in a enterprise, a debit entry in one of the accounting system will often be accompanied by a credit entry in one other accounting system or in more than one accounting system. Similarly, a bookkeeper might be required to make more than one debit entry for a single credit entry. The monetary performance of an organization can be clearly ascertained based mostly on the accounting details obtained from the double entry accounting systems.

Basically, there are two strategies of book keeping. One is the handbook method of bookkeeping and the other is the computerised methodology of bookkeeping.

Manual bookkeeping is the oldest type of bookkeeping where within the bookkeeper might be using a journal book or a ledger book to report the completely different accounting entries associated to the enterprise transactions. Small enterprise owners still prefer manual method of bookkeeping as it is economical and is suitable for maintaining less complex enterprise transactions.

Computerised bookkeeping helps the bookkeeper to perform bookkeeping of complex business transactions in a much simpler and quicker manner. An accounting software system is usually used to do the accounting entries. The advantage this system has over the guide bookkeeping system is in the ease of producing reports and performing calculations. Complicated calculations could be carried out accurately and quickly.

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