Frequently Asked Questions
What is the difference between bookkeeping and accounting?
Bookkeeping involves the daily recording of financial transactions, such as sales, expenses, and purchases, in a systematic manner. It is the foundation of the accounting process, which includes interpreting, classifying, analyzing, reporting, and summarizing financial data. While bookkeeping focuses on recording transactions, accounting involves a broader scope, including preparing financial statements and providing insights for decision-making.
How often should I update my bookkeeping records?
It’s best to update your bookkeeping records regularly to ensure accuracy and stay on top of your financial situation. For most small businesses, updating records weekly or bi-weekly is sufficient. This frequency helps in keeping track of income and expenses, reconciling bank statements, and ensuring that financial data is current for any business decisions or tax filings.
What documents do I need to keep for bookkeeping?
Essential documents for bookkeeping include invoices, receipts, bank statements, payroll records, tax forms, and any contracts or agreements related to financial transactions. Keeping these documents organized and accessible is crucial for accurate bookkeeping, tax preparation, and auditing purposes.
