Bookkeeping is one of an essential activity to be performed by every business operator, that facilitates him to assess that whether his business is running in profit or not at the end of financial years after making necessary payments and taxes to the government. The activity has been in practice from many years and will continue to be practiced by all business operators across the world without any second thought. But, interestingly with changing time the methods and practice of bookkeeping has undergone vast changes and it is believed that in coming years also new techniques of bookkeeping will be introduced that will make the task an agreeable process for the business operator whether they big or small read more here.
What is bookkeeping: In simple words bookkeeping may be defined as the process of recording transactions made by an organization for smooth operation of its various activities. You will agree that the main objective of every business is to earn profit. If the income of the business exceeds the investments that means it is running in profit, but unfortunately if the case if the vice-versa then it means that your facing loss in your business.
But, how this profit and loss is calculated can be done only by recording all the cash transactions made by the business in the form of payment for the items purchased to produce goods, payment made in the form of salaries to the employees, payment in the form of constructing a production plant, etc. If the amount of all these payments is less than the amount received from the customers purchasing the products manufactured or sole by the business group that means it is running in profit.
To record all these transactions in appropriate way it is necessary that the person appointed to get these jobs done should be well qualified, skilled and have vast knowledge of recording all these transactions in their appropriate records. Because a little mistake in recording the entries of these transactions might result in huge loss to the business group or might require long hours to detect any mistake. To avoid all such problems it is imperative that every financial activity of the day should be recorded on a daily basis.
Earlier the job of calculation was conducted manually with the help of calculator which was time-consuming as an impact of this with increasing use of computer during last few decades’ different types of accounting software’s emerged on the scene that made the accounting job quite easier. But, it made necessary for the then accountant to be computer savvy along with being equally qualified for the accounting job.
This adversely pushed to business organizations towards additional financial costs as now they had to pay higher salary to the person looking after their accounting job because of his additional skills and qualifications. The highly affected group of this financial burden was the group of small and new business operators who had limited funds to operate their business and paying high salary to the accountant was not less than a nightmare for them.
Interestingly, going through the concern of small business operator and start-up trend of online bookkeeping has emerged as the latest of bookkeeping and Xero Bookkeeping is one its type. The persons providing services of this bookkeeping practice are known as Xero Bookkeepers in Perth.
What Xero Bookkeepers do for your business? As referred above Xero Bookkeeping is one of the methods of online bookkeeping, it means it is a cloud based bookkeeping method wherein the accounting details of business operator are not recorded in some accounting books or software but recorded on the web server. For this purpose, the business operator is providing a software by the bookkeeping firm providing the service of Xero bookkeeping. The business operator has just to record all the transactions whether it is an investment in the form of payment made under different heads or income in the form of payment received from buyers and clients in the software after which going through the nature of these transactions they are recorded in different heads and on the basis of which different types of financial statements like profit and loss account, bank reconciliation statements etc are prepared.