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What is a Proper Bookkeeping Process?

March 28, 2022by People First0

As I mentioned in a previous video, one of the key questions to ask a bookkeeper when you are interviewing them is “What are the core components of a proper bookkeeping process?“

The components are Accounts Receivable, that is money that is due the business.  A/R consists of tracking customers, creating invoices, collecting what is due which includes sending out statements. Finally depositing those funds into the bank.

Another component of bookkeeping is Accounts Payable. This is money the business owes.  When a business makes purchases it then pays for those purchases. Some businesses are able to obtain terms with their vendors and so the A/P process is to record purchases, track when the payment of those purchases are due and make those payments.

Inventory is another component of bookkeeping. If you have inventory, it must be tracked.  The purchase of inventory is tracked differently.   

Then you have your various banks that have transactions that need to be tracked and reconciled.  Likewise with any credit cards or loans that the business has.  Regular reconciliation of those items are critical to ensure there is no fraud or theft.  

If you have more questions, I suggest consulting with an experienced bookkeeper.

People First

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