Recording Transactions

Every financial transaction (sales, purchases, payments, etc.) is recorded in the appropriate accounts. This can be done manually in ledgers or using accounting software.

Managing Ledgers

Transactions are categorized into different accounts, like revenue, expenses, assets, liabilities, etc. Each account has a corresponding ledger to keep track of the financial movement.

Maintaining Journals

The day-to-day financial activities are initially recorded in a journal, often called a “book of original entry.” These include sales, purchases, cash receipts, and payments.

Balancing Accounts

Bookkeepers ensure that the records are balanced. This means verifying that the credits and debits are equal and that the accounts reflect the true financial position of the business.

Reconciling Bank Statements

Regularly checking the business’s bank statements against the company’s financial records to ensure consistency and accuracy.