Bookkeeping rules are basically the rules which have to be followed in order to properly record financial transactions. Bookkeeping rules are the foundation for accurate accounting and financial reconciliation. (2) The basic principles of bookkeeping The difference between an income statement and a statement of accounts: Income statement refers to those records which reflect the income earned by a business. On the other hand, statement of accounts tells us the difference between assets and liabilities.
Before the inception of computers, bookkeepers were required to do manually record the daily transactions. In the advent of computers, bookkeepers and accountants started the practice of entering the data in their computers and storing it electronically. This made the job much easier and faster as well.
Today, there are several computerized systems available in the market which facilitate the entry of transactions made by accountants. These systems not only record the transactions but also keep track of them for future reference. Another advantage of computerized systems is that they eliminate the tediousness involved in the manual recording process. This also eliminated the possibility of errors being recorded erroneously which could lead to misinterpretation of data, which may then cause disastrous results.
As computers revolutionized the field of accounting, the need for bookkeepers also decreased. In such a scenario, many companies hired bookkeepers who would take care of the financial transactions. Though some companies could afford to hire several accountants, others could not afford to do so. Hence, the need for manual bookkeeping became significant and accounting records had to be maintained manually. This led to rise in the number of fraudulent bookkeepers who were given the responsibility of recording financial transactions.
In order to control this malpractice, the US government announced a set of ethical codes which were to be adhered to by all accountants. This code of ethics would make the work of a bookkeeper much more transparent and would help in reducing the scope for fraud. Apart from this, computerized bookkeeping became the most preferred choice because it helped in reducing the workload of the bookkeepers while at the same time increasing their productivity. Computerized bookkeeping has come a long way since its advent; it is now possible to store, file and analyze accounting data without any hassle. The computerized bookkeeping is an ideal solution for small business owners as well as individuals.
Bookkeepers play a crucial role in a company. Without bookkeepers, accounting records would not be available which would hamper profits. Bookkeepers are valuable for a company because their records would contain information regarding the income and expenses of a company. It is important to hire a professional bookkeeper because he can provide a lot of benefits to a business owner. All that one needs to do is to check whether the bookkeepers the company is using are professional or not.