Before computers were in common use, bookkeeping was done by an actual bookkeeper. This person kept a
company's day-to-day financial records by manually recording every business
transaction into a journal.
The journal is a book of original entry for
transactions. The journal entry included the date, the name of the accounts to
be debited and credited, and the amounts.
The bookkeeping process further required that
all journal amounts be rewritten in (or "posted" to) the company's general ledger and subsidiary ledger
accounts.
With the writing and rewriting of so many
amounts (as well as the manual calculations) it was realistic to assume that
some errors would occur in the bookkeeping process. This potential for errors
created the need to periodically "prove" that a company's accounts
were "in balance," meaning the total of the debit balance accounts was equal to the total of the credit balance accounts. An internal
document called a trial balance was
designed to give that proof. If the trial balance did not balance, the
bookkeeper had to go back, transaction by transaction, to find and correct the
cause of any disparity. Once the trial balance was in balance, the bookkeeping
phase was completed and the "books" were turned over to the company's
accountant for the preparation of financial statements.
Having understood the basics of book keeping,
we now go into the practical office book keeping. In a typical office account
setting, provision should be made for the following documents;
1. Cash/Bank book/Ledger.
2. Payment vouchers.
3. Receipt booklet.
4. Journal voucher.
5. Invoice booklet (trading and service
company)..
6. Cheque register.
7. Forms for check and balance (internal
controls) such as payment requisition form, summary of expenditure form, etc.
8. Operation Manual.
9. Financial/accounting policies.
8. Accounting software/packages
With the fast pace of computerisation in the
financial sector it will be necessary that office procedures should be
computerised as well. Hence, the need for an accounting package.
The type of accounting package to be adopted by
an entity will depend on the size and mode of operation and whether it is for
profit on not for profit.
Accounting
packages will be discussed fully in subsequent post
In
the event of having challenges acquiring an accounting package, Microsoft
office Excel can come in handy as it can perform all tasks embedded in most if
not all accounting packages. All you need do is design finance and account
template to suite your line of business.
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