Bookkeeping, in business, is the recording of financial transactions, and is part of the process of accounting. Transactions include purchases, sales, receipts and payments by an individual or organization. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper and files forms with government agencies. There are some common methods of bookkeeping such as the single-entry bookkeeping system and the double-entry bookkeeping system. But while these systems may be seen as "real" bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.
Proper bookkeeping is one of the most critical tasks for a small business. Good records are necessary for the preparation of tax returns, Internal Revenue Service (IRS) audits, insurance audits, and bank financing. Therefore, it is important to get started with a good accounting system, and maintain your backup records in a logical manner. Some new business owners think they must hire a costly CPA or a full-time bookkeeper, but this is simply not the case. In fact, anyone can keep proper records by keeping in mind a few simple principles.
Every business needs someone to keep track of its income and expenses. If you start a bookkeeping service, you can earn money by providing your services to businesses that do not employ an in-house bookkeeper. This is a business you can run from home or from a commercial location, starting out with basic office equipment, office supplies and bookkeeping software. If you have bookkeeping know-how, starting this business may be easy. The hardest part may be creating a business plan and finding your first client.
