Bookkeeping is an integral part of the financial profession. It is also a vital part of all accounting systems. The main purpose of bookkeeping and its main function is a systematic compiling and recording of financial transactions.
Usually bookkeeping is referred to a process of measuring, recording and identifying important economic information in use related to an organization or other commercial and non-commercial formation in order to permit informed judgments by users of the information.
Goal of an efficient bookkeeping
Bookkeeping helps to prepare financial statements and financial data in general. It encompasses the record-keeping aspect of accounting; therefore, accounting principles can also be applied to bookkeeping. Often information which is related to the company’s financial position is presented in a balance sheet and the disclosures about operating results are displayed in an income statement. In addition, some data having relation to liquidity of a company and changes in company’s financial structure usually is reviewed in a statement of changes in financial position. Financial statements are needed in order to provide information about company’s past performance which provides an opportunity to project what might happen in the future with that company.
All the financial data of a company provide the bookkeeping input. These could be payroll time cards, reports as well as special journals like sales journal or purchases journal, cash-receipts journal, bank checks and invoices where every recorded information or as it is called – transaction is identified in two aspects or dimensions – debit and credit aspect.
Bookkeepers, accountants and bookkeeping associations
Usually there is a special person who manages bookkeeping in a company. He or she can be professionally called a bookkeeper or an accountant. An accountant prepares certain adjustments to recognize events that are considered to be already completed transactions related to company’s revenues, expenses, employees’ wages etc.
Bookkeeper position requires a person to be able to prepare financial documents and reports, payrolls, including taxes and garnishments, process payable accounts, as well as to maintain daily bank activities and assist with bank reconciliations, while working in the field of a basic system of double entry bookkeeping was invented more than five hundred years ago by a Cistercian monk called Luca Pacioli. All the bookkeepers must have the core accounting skills in order to be able to function in this professional field.
There are special bookkeeping associations aiming to provide support and standards for those who work in bookkeeping industry. USA has several professional organizations maintaining, developing and ensuring information on bookkeeping standards such as National Bookkeepers Association, National Association of Certified Public Bookkeepers, American Institute of Professional Bookkeepers and an Institute of Certified Bookkeepers (ICB). ICB has more than 20 years of professional history. It was founded in order to elevate and raise the standards of bookkeeping worldwide.
Bookkeeping certification in the U.S.
In USA being certified bookkeeper means having a Certificate of Bookkeeping, being a member of Bookkeepers Association, performing bookkeeping services at a significant level for a period exceeding 2 years as well as having a proven level of bookkeeping knowledge.
According to ICB bookkeepers’ duties include: recognizing what the business does and making sure the customer gets billed, issuing and then recording that invoice and making sure the customer pays. Bookkeepers are responsible for: tracking down all the ways a company spends money, recording cash documents, monitor company’s ordering system, receive, check for validity, schedule/note for payment supplier invoices, paying company’s suppliers and recording payments, paying employees and recording the payment and the payroll obligations.
All the ICB bookkeepers have been provided an ICB's Code of Professional Conduct which has special rules that can be applied to all members of the Institute. Members must comply with the requirements of these rules and any failure to do so shall constitute misconduct which fundamental principles are listed on ICB’s webpage.
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