Bookkeeping refers to the processing & recording of day to day financial transactions of a business. These financial transactions are taken from information such as sales invoices, supplier invoices, bank statements and expense claims. They are recorded in what is commonly called the ‘books’ of the business or company using either a spreadsheet or accounting software depending on what most suits the business.
Bookkeeping is the first step in the accounting process because without a summary of all the financial transactions of a business an accountant would be unable to:
- Analyse a business’ performance;
- Prepare accounts;
- Fill out tax returns.