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Bookkeepers are often confused with the general term ‘accountant’. In its most basic sense it is what people consider to be the accounting process of keeping constant notation of financial transactions. Every business, large and small, is required by law to ‘keep books’. This is the process that documents and verifies every financial transaction. This work can be complex, particularly when it comes to finalising end of year business statements and tax returns.
Bookkeepers are specialised in reading financial statements and recording all transactions, both incoming and outgoing. There are a number of key documents involved in the process including; sales statements, purchase statements, income statements and ingoing/outgoing payments.*
Following the collation of data by the bookkeeper an accountant will then create a report from the information. Obviously, the bookkeeper has a key role in the accounting process.
The most common way bookkeepers work is to insert data into a single entry bookkeeping system. The less common but increasingly common way is using the double entry bookkeeping system.
A lot of bookkeepers have previously worked as accounting technicians. Having collected data, bookkeepers will correct ledgers if there are errors and bring ‘the books’ to the trial balance stage. From this the accountant produces income statements and balance sheets.