Types of bookkeeping systems

There are several types of bookkeeping available in the accounting world where one or more bookkeeper can help resolve all your accounting problems very efficiently. Once you get a hold on what types of bookkeeping systems are available, it gets easy to decide which one to choose from and while ones can be more advantageous for your business.

Below are the types of bookkeeping systems available in the accounting world.

Single entry

This type of bookkeeping system is mainly used for businesses which are newly started or have very small base as they have fewer transactions. This informal way of bookkeeping is relatively simple, easy to maintain and practical as claimed by the bookkeepers in Melbourne. This method records money disbursement, sales, purchases or cash receipts. The memo has the records of  inventory, capital and inventory. Its either the daily summary or the monthly summary which we keep track of. Any transactions will affect just a single account, and hence the name single entry bookkeeping.

A major disadvantage of this type of bookkeeping could be that it may be error prone and incomplete at times. It is still acceptable method of recording if you consider this for tax purposes.

Double entry

This is the most standard way of maintaining bookkeeping done by most of the outsourced bookkeepers or many companies. Although the process is quite complex, it is still very detailed and informative in case you plan on auditing later. Here all your debt and credit are systematically tracked for every transaction. This process affects 2 or more accounts. This process is very accurate and records all the company financial transactions. Read more here!

Manual

This is the traditional way of bookkeeping when computers were not available. All the finances and business transactions are recorded manually and files are maintained in the warehouse. Even though it is a very old and outdated method of bookkeeping, many outsourcing company bookkeepers in Melbourne still tend to use this method. A major set back of this process is that the work is very tedious not just for recording but also to maintain and retrieve the reports in case the reports are demanded at a certain point of time. Besides that, it is one of the slowest method you could ever find.

Digitized

This is the latest and the most innovative way of recording, managing and retrieving all the financial information any company has. This way of recording information is very apt if you are using computers and all your paperwork are transformed to digitized way of handling things. Bookkeepers in Melbourne area are very fond of this method as it is the quickest. There are various accounting package solutions available in the  market to manage a company’s accounting data. Bookkeeping process has become even more easy, faster and efficient with the help of the highly sophisticated tools and techniques. This is one of the fact you should keep in mind ;although the tools can replace the speed and efficiency, it still is built on the underlying principles of traditional bookkeeping and follows all the processes much similar to what we did in the good old days. It just eliminated the tedious process of managing bookkeeping. This method is very reliable, efficient and convenient.

However some small business companies cannot afford having computerized system, hence they still continue using the traditional bookkeeping, as explained here: http://www.e-market-online.com/merits-of-outsourcing-competent-bookkeeper-melbourne-services/

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