What Are The Two Distinct Types Of Bookkeeping Trends?

Posted by Ron William on March 10th, 2018

Keeping records of your financial stuff is naturally essential and here is where a bookkeeper comes to define such importance.

Frankly speaking, a bookkeeper is that person keeping a thorough; systematic; attributive and lawful record or information of financial statements or matters concerning the complex dealings with the economy.

Bookkeepers are also called as accountants and serve a plethora of activities regarding financial things and are considered highly significant for an organization's economical operations. As a fact, one would find accountants in Reading or keeping records in almost every organization that matters for the society. Thus, these professionals are highly demanded too in the stream of conductions where money is involved. 

Are you assuming how do these accountants produce their workflow? Or how do they do it? Interested how your accountant helps you on a daily basis? Then read this article on to know more about the standard methods used in bookkeeping.

The Common Two Elements in Bookkeeping

Bookkeeping comes into action stating about the financial dealings and management of an organization by federal instructions or regulations. In today's digital age, two types of bookkeeping are taken as standard methodologies. Scroll down to know more about them...

1. Single Entry System

• The single entry system has been a widely used system for an extended period and is still intensely used regarding financial matters that especially require its attention. Its distinctive features are furnished below:
• It is usually used for business usages for simple transactions. Transactions that are done at a minimal rate and which do not require strict observation upon maintaining information are usually done by this process.
• It takes into account the activities of business sales and financial transactions in a business when the particular need is responded in the form of incurrence.
• The entries do not go same with corresponding accounts' transaction. This, in terms, can make the identification process of revenues and expenses into a complicated work.
• Single entry bookkeeping carries a cash entry journal, cash disbursements journal and bank statements.

2. Double Entry System

• Contrary to single entry system, it comprises of a complicated procedure that keeps a record of the financial transactions of a business, which is much more complicated.
• It works primarily in two steps, the first of which is posts single transactional stuff as income or expense items. Then, it goes on creating another account to identify the said transaction or the corresponding account.
• Companies interested in the accumulating their financial matters through receivable accounts usually use this method.
• Single entry system consists of journals. Double Entry Bookkeeping contains debits and credits as the expression bookkeeping service in Reading regarding the financial increase or decrease in each account influenced by the transaction. Simply said, it is the tougher sibling to single entry bookkeeping.

The Concluding Expression

Lastly, it can be said that new methods and technological advancements have not excluded bookkeeping from there sphere. Innovations are emerging in each moment. But, it is true that expertise of a human accountant ultimately and experientially outwits these features.

Resource Box: The author has been one of the expert accountants in Reading and wrote this article down to offer some general knowledge on modern bookkeeping service in Reading and the major types of accounting processes.