Bookkeeping is a word that strikes a fierce lightning bolt of pure boredom through people’s minds! The immediate image that springs to mind is Scrooge hunched over a podium for endless hours scribing with a quill onto endless pages in the doomsday manual! But, if you’re like me (yar, like you are bang into numbers and stuff!!) bookkeeping makes you lick your lips wanting to dive into people’s business accounts to take care of the details that can mean the difference between success and failure. Yup, because that’s where the devil always is, in the details!
So, on the face of it we all know what bookkeeping means. It involves the recording of financial transactions such as invoicing, purchases, sales, receipts, payments etc.
Bookkeeping can take many forms. Old school bookkeeping generally involves manual data entry into a computerized (or even handwritten, Scrooge!!!) system. This could be a simple spreadsheet or a more complex piece of software.
New technology now means that much of the bookkeeping involves transfer of data from one piece of software to another which is generally much quicker than manual data entry once formatted correctly. Data manipulation (something else I love doing) is a key part of bookkeeping and the bookkeeper must ensure the data is not manipulated in a way that then creates errors or misinformation. This is an actual skill and relies on enough knowledge of the information along with data manipulation abilities.
New accounting systems such as Quickbooks and Xero generally integrate with other software making the information pull instantaneously. In this situation, the bookkeeper’s tasks are greatly reduced and tend more towards reconciliation and data checks to ensure everything looks good. Again though, this takes understanding of the data being captured and the processes being followed.
Bookkeeping is vital to a business as it is the process by which information is converted into data.
Here’s another word that summons that lightening bolt from the sky and causes faces to skew into all manners of contorted emotions … accounting.
Business accounting encompasses bookkeeping but takes the data to a new level. It involves analyzing, interpreting and converting the data into financial statements and meaningful information. Communication of the information needs to be understandable and easy to read without too much in-depth thought.
The accounting function involves collation of data, creation of profit and loss statements, creation of balance sheets and help with creating forecasts for future business and growth.
This is done through experience and expertise relating to the industry and an understanding of accounting practices.
Accounting is maybe even more vital to a business. It is one of the four main pillars that impact the success of a company, but often business owners are unsure of exactly what the numbers represent.
It can be difficult for a business owner to fully understand the profit (or loss) they are making from just looking at top level numbers alone. An accounting professional can help to drill down on this information and see which parts of the business are doing well, and which aren’t. It can help to have someone removed from the core business activities (and all the emotions that go with it) to give you the reflection and objectivity , which maybe crucial to understanding where your business is heading.
RDT provides both bookkeeping and accounting services.
Rhian has a business management degree with a focus on accounting and qualifications in management accounting, financial accounting and advanced management accounting which allow us to offer these services:
*Data manipulation and analysis
*Reconciliation of accounts
*Creation of P&L Accounts
*Creation of Balance Sheets
*Analysis of inventory
*Assistance in implementation of sound business practices and accounting procedures
Please get in touch if you need any assistance or want to talk about your current set-up.