The 3 Key Elements of a Bookkeeping Service

Bookkeeping is an activity which is primarily associated with financial data and business operations recording. It ensures the process is done in a seamless and orderly manner. Additionally, the bookkeeping services in Dallas TX, and elsewhere, encompasses all the major procedural aspects of accounting work which thoroughly assists in the record-keeping function. In this particular blog post, we are going to discuss the three key elements of bookkeeping, knowing so would prove to be beneficial for your business needs. So now, let’s get into that right away!

Journals - For a bookkeeping system, journals play a vital role. These are the first place where you can lookup to find information about a complete transaction(s). For the general journals, they are used by the particular businesses that utilize two-entry accounting setup and record debit/credit amounts for each account for every transaction taking place. Journals can also list out a short description of every involved transaction. For instance, some businesses have started introducing specialized journals, where each one records some specific kinds of transaction based upon the requirement. This saves time and money.

Financial statements - These convey the essential information available in the system about the current financial situation of the business to a company or stakeholders. In general, bookkeepers in Dallas, and elsewhere make use these four key major financial statements:

• Balance sheet: It provides a basic description of the financial position of the company for a specific particular date and time by listing details of the liabilities, assets, and also the equity of the shareholders.
• Income Statement: It shows net earnings of a business for a particular time period.
• Cash flow statement: It showcases the increases and decreases in cash flow for a set period, which related to business investments, operations, and financial activities.
• Shareholder statements: It shows all the changes in the retained earnings of the company.

Ledgers - Ledgers sort transactions according to the account type and its subsequent impact on the business operations. These type of categorization in the ledger includes expenses, liabilities, assets, as well as the revenue. Transaction information fetched from business journals get recorded or posted to the ledger on specific time intervals.