The uses of double Entry bookkeeping
// March 18th, 2011 // Uncategorized
Double entry bookkeeping is normally used by qualified accountants and other experienced persons with a financial experience to maintain and keep control of their financial logs, with or without the use of professional bookkeeping software. With many business owners wanting full control and full knowledge of all costs incurred to the business it makes sense that they take a more involved role in finding out where monies are going. Using a system such as double entry bookkeeping will mean each item would be listed and how much was paid for said item. As all transactions are added individually it can make tracing a purchase or sale very quick and easy. If your company bookkeeping is done correctly the double entry bookkeeping system can work very well. All accounting completed on a double entry bookkeeping system will result in one transaction, creating two entries on the bookkeeping log without exception.
The two transactions are known as credits and debits and without both of these the books will be unbalanced. Credits and debits do not always mean what you think they do, depending if you are looking on the balance sheet or in your bank account. A credit can actually mean a debit and vice versa. Some people find double entry bookkeeping hard to grasp as it is hard to get you head around one single transaction having to entries. With every single transaction that is made you will see one account go up and one account go down. Double entry bookkeeping is very useful when keeping account of money in your bank account and products or supplies that you need. As the account balance decreases as a purchase has been made the account which the product belongs in would increase as an item would be added. Double entry bookkeeping can be a lot harder to learn then single entry bookkeeping and can require years of formal training. Even though double entry bookkeeping is harder to learn and takes a longer time frame most employers will look for this over single entry bookkeeping. Taking the time to learn double entry bookkeeping can help you maintain your company accounts with ease and a lot of stress can be lifted.
