Managing Your Finances

 

Different Types of Bookkeeping Functions

Bookkeeping has become more efficient with the change of time. Bookkeepers no longer have to go through a difficult time performing manual calculations as the introductions of computers and accounting software have lightened the load for them. For instance, the accounting software will refuse a journal entry if the debit amount entered does not match with the credit amount. And because account balances and journal amounts are electronically calculated and posted, human error is significantly decreased, and may even be eradicated.

In many big companies, bookkeeping functions are designated among clerks that specialize in specific tasks such as accounts payable, accounts receivable, payroll and accounting. These clerks use the accounting software to carry out their specific functions properly.

But what do accountants and bookkeepers really do? How do they really carry out their accounting and bookkeeping functions?

An important and critical function that they do is to compute the payroll. Payroll clerks record salaries earned as well as the taxes paid by every employee. They also have to make sure that the necessary deductions are made such as federal, state or local taxes as well as personal deductions for leaves, retirement, sick pay or medical benefits. There are some companies that have their own payroll clerks, while others leave the job to outside specialists.

Accountants and bookkeepers in the accounting department receive and record payment transactions from the business’s customers. It is their responsibility to ensure that the money is accurately sourced and properly deposited in its designated accounts. They also prepare checks and records and manage cash to channel it to the right schedules – how it will be spent, where it goes, how much will be allocated for different areas, how much will be invested and how much will be defrayed for the business’ financial obligations. In addition, they are also in charge of monitoring purchase order placed for inventory. This includes products that the business will sell to its clients. They also keep track of assets such as a business's fixed assets, property and equipment. These include office building, plant and machinery, office furniture and fixtures, computers and other equipment as well as the even the smallest office supplies such as pencils, staplers or paperclips.

Those in the cash disbursement or payables area are in charge of activities that the business undergoes to pay for its loans, purchases, salaries, services, supplies and taxes. They must ensure that all these are properly accounted for.