Improve Financial Functions With Double-Entry Bookkeeping Service

Bookkeeping Service, Double Entry Bookkeeping Service | 0

Double Entry Bookkeeping Service

Double-entry bookkeeping is complicated for a layman. 

The concept can be explained by drawing a comparison with Newton’s 3rd Law of Motion – ‘every action has an equal and opposite reaction.’

Similarly, in a double-entry bookkeeping process, a transaction is recorded twice, i.e. as a debit and a credit.

Well, this blog is written with an intention to simplify double-entry bookkeeping concepts and to show you how a Virtual Bookkeeping Assistant can provide professional double-entry bookkeeping services coherently.

Have an insightful reading experience.

Double-Entry Bookkeeping Elucidated

As stated in the beginning, a double-entry bookkeeping is all about having 2 entries per transactions and the amount entered as debit should be equal to the amount entered as a credit.

For instance, imagine a grocery shop owner borrowed $1000 from a person. So, the shop owner who follows double-entry bookkeeping system will enter this transaction twice.  $1000 to an asset account and $1000 to a liability account.

DID YOU KNOW?   In the year 1494, 2 close friends, the famous Italian mathematician Fra Luca Pacioli and the polymath Leonardo Da Vinci together wrote a book on double-entry system titled, ‘Summa de arithmetica, geometria, proportioni et proportionalita’. Published in Venice, it introduced enhanced ways of bookkeeping to Europeans.      

Now you would want to ask a question, why one should opt for double-entry bookkeeping, when one can follow the easy single-entry system?

The answer is simple, its advantages surpasses any other bookkeeping approaches.

Accurate Records: Making the financial report from a double-entry book will be accurate, for it has all the important details recorded.

Contrasting to the single entry system, a clear view of who owes the company and who needs to be given money is stated candidly.

Minimize the Errors: An error in a double-entry book can be found swiftly and rectified immediately.

Reliable Financial Comparisons: Companies can compare year-by-year financial performances effortlessly, as double-entry book showcases arithmetical accuracy.

Proper Scientific System: As it is based on scientific methods, it allows one to follow the accounts by specific rules, principles and techniques. Here, chances of fraud will be less.   

Assist Big Business: the number of transactions per year in a big business is innumerous. A double-entry bookkeeping system aids in recoding huge voluminous accounts easier.

Even a highly knowledgeable accountant finds double-entry bookkeeping, time consuming and tedious. It is complex and costly.

This is where a Virtual Accountant would play a savior role. 

Especially for those organizations who would want to gain the double-entry bookkeeping advantages, but runs out of time and are low on budget; Virtual Bookkeeping Services are indeed a blessing.

According to a report published in goremotely.net, small businesses rank accountants and bookkeepers as one of the most important professionals in their firm. 

This is because, most small business owners lack expertise in it, but value a well maintained accounts book and error free financial details.

Well, not every small scale firms should choose double-entry bookkeeping. Go for it only if it is absolutely needed.

Virtual Bookkeepers and double-entry bookkeeping

 A Virtual Bookkeeper is an accounts professional working remotely for various clients and assists them in preparing and managing accounts books.

Anything concerning finance and accounting requires focus and precision. But, when accountants do multi-tasking, chances of glitches are high.

A Virtual Bookkeeper will only be doing the tasks that fall under bookkeeping tag and so, they can be entrusted with complex double-entry bookkeeping tasks.

Some of the most common bookkeeping mistakes that cause heavy loss for businesses are failing to back up data, failure to keep books up to date and even the habit of resorting to the simplest ways possible.

Well, there are AI empowered technology that would streamline and automate bookkeeping processes, but it is not affordable by small businesses.

So, a Virtual Bookkeeper not only helps in saving money, but also in bringing efficiency in the entire bookkeeping process.

A Virtual Bookkeeper Can Take Up the Below Mentioned Double-Entry Bookkeeping Tasks:

  • The Chart Creation for posting the transactions
  • Entering each business transaction details into the respective Debit/Credit spaces
  • Inspect the process at regular intervals
  • Adhere to the accounting equation and get the accurate balance
  • Back-up the data
  • Prepare financial statements accurately
  • Analyze and compare the company’s financial performances

They can complete all the tasks along with the general financial tasks at unimaginable costs and in an orderly manner.

But if you think a Virtual bookkeeper is a freelancer with no professional background, then ‘no’, you are wrong.

Most of the Virtual Bookkeepers have immense knowledge and experience; but they chose to provide their expertise remotely for flexibility.

It is sad to note that many small businesses take bookkeeping flippantly.

There are brilliant small businesses out there, especially in North America and Canada that shuts down within a small time period; despite having right resource. Bookkeeping procrastination is one of the major reasons. Throwing receipts away, wrong amount entering, fraudsters within the organizations, hiring of inexperienced bookkeepers, neglecting bookkeeping principle, etc are just going to create jeopardy amidst all other chaos.

A double-entry bookkeeping process and a knowledgeable virtual bookkeeper is any business’s trump card to gain more profit and be successful.

In finance and accounting, there is no time for guessing. It is all about accuracy and having someone saying, ‘no time’ is not an excusable mistake post having bookkeeping errors.

So, in 2021, if your business financial goal is to experience a seamless bookkeeping process that gives 3-dimetional view, then adopt double-entry bookkeeping system. To make the task simpler, get a virtual bookkeeper to do it.

Accuracy of financial statements is crucial in decision making. Many a times, the thin line between the success and failure depends on how much money one can access on a critical situation. What an up-to-date account book gives is the chance for the business owners to foresee their future financial moves and plan ahead.

The Culmination

An industry standard double-entry bookkeeping, calls for those professionals with strong grip over finance and accountancy.

If a business is planning to rely on a double-entry bookkeeping technological platform, it still requires an expert to understand the ways to operate it.

Essentially, as an entrepreneur you need more focus on your cash flows and an assistant who can create flawless financial records.

Ask yourself, how knowledgeable you are in understanding problems and challenges in your own business bookkeeping system.

If your confidence levels drop in this matter, try hiring a Virtual Bookkeeper.

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