Book Keeping: Meaning, Importance And Essential Qualities

Table Of Contents

1. Meaning Of Book Keeping
2. Importance Of Book Keeping To Business
3. Essential Quality Of A Book Keeping
4. Common Book Keeping Practices
5. Book Keeping Ethics

Meaning Of Book Keeping

Book keeping is the act of recording business transactions systematically, in different books of account, in order to provide information to those interested and may want to make use of it. It can also be seen as the recording of financial transactions. Transactions include sales, purchases, income, receipts and payments by an individual or organization. Book keeping is usually performed by book-keepers.

Book-keeping should not be confused with accounting process is usually performed by the accountant. The accountant creates reports from recorded financial transaction recorded by the book-keeping and files from government agencies.

Importance Of Book-Keeping To Business

There are certain activities in a business organization that must be done accurately. Book-keeping is one of them and should be given proper is one of them and should be given proper attention for the following reason;

1. It help to keep track of financial records and postings with the help of professional book-keepers who monitor the progress of the business.

2. It enable a business to identify which among its products is doing well in the market and which goods need to be improved on.

3. Book-keeping is helpful in organization and preparing financial statement.

4. Book-keeping is trouble-free to determine and identify the service or receipts tha pertain to activities in the organization.

5. Book-keeping help to determine the financial position of the business much more clearly at any give time.

6. Book-keeping if done properly, can help to detect and reduce accounting errors.

7. Book-keeping makes producing the year end accounts easier. Thereby lowering accounting fee for the business.

Essential Qualities Of A Book-Keeper

A book-keeper or keeper of books is one who engages in updating, managing and maintaining business account and other records. A book-keeper is usually employed or hired by a business to ensure that all accounting records are kept in order and kept within the regulatory guidelines or laws.

Qualities Of Book-Keepers

The following are the qualities of a book keeper;

1. A good book-keeper needs to be detail-oriented, organized and mythodological.

2. A book-keeper also need to have patience, persistence and tolerance for lots of number and calculations.

3. A book-keeper must have good knowledge or understanding with regards to accounts.

4. A book-keeper has to be enthusiastic when working in group. He should get acquainted with other individuals of his department.

5. A book-keeper has to be trust worthy. The should not leak information from the company’s account and finance to other persons.

6. A good book-keeper must be open and clear in communication in order to avoid mistakes.

7. A good book-keeper must also be a good listener.

8. Integrity is an important quality a good book-keeper should have.

9. Dedication: A good book-keeper must show dedication in his/her job at all times.

10. Foresight Or Strategy: A book-keeper should have foresight about his job, in order to improve the quality of his job.

Common Book-Keeping Practices

For efficient performance book-keepers and accountants must adhere to the following skills:

1. It is crucial to record all financial transactions in a clear manner. The work should be easy to display, in case there is cause to review the book.

2. It is essential for an organization to authorize two or three people to sign cheques.

3. The accounting system should be either cash based or accrual based.

4. Method Of Tracking Funds: The method of tracking funds depends on the size of the organization. It can be done using computer effort.

5. Making Use Of Quality Software: A good software program will help you track expenses and income and post them to the right accounts;

6. Book-keepers should have at least a working knowledge of how merchant account works. This is critical in order to negotiate the best rate and catch errors an monthly statements

7. When clients are involved, outstanding invoice and collection procedures should be monitored. Be sure that every invoice includes the payment terms;

8. Be very consistent: Specific times of the day, week or month should be set aside to organize income and expenses into accounting programme;

9. Use separate checking account for business and personal transactions. This makes it easier to reconcile your books each month;

10. Always back up your data: If there is a tragedy, like a hard drive failure or a power surge, you risk losing all your data if you don’t have a back-up copy of book -keeping data.

READ ALSO: Entrepreneurship Skills: Meaning And Importance

Book-Keeping Ethics

book-keeping is not an easy job. Attending to an organization’s various growth parameters has a lot of managing financial data is a continuous and often tedious process that requires accuracy, honest and caution. This is why book-keepers must strictly adhere to maintain a clean and credible image within and outside the organization. Some of the ethics of book-keeping include:

1. Unwavering Integrity: Honesty, diligence and responsibility are a few basic qualities a book-keeper should posses. Book-keepers should never act in ways that would bring their lines of work to disrepute or shame.

2. Firm Objectivity: As a professional, a book-keeper should not do anything to compromise or undermine his ability to review records properly. He should remain impartial and unbiased all times.

3. Strict Confidentiality: Financial data is crucial to every organization. All information obtained through book-keeping belongs solely to the client or employer. Book-keepers should always be careful in the use of information. He must protect all information.

4. Professional Competency: As an esteemed professional, a book keeper should only accept duties he/she is capable of performing competency. Using his knowledge, skill and experience, a book-keeper should know when to yes to certain tasks and when to ask for help.

5. Continuous Improvement: Learning never ends. Book keepers should always be on the active lookout for ways to improve their skil, to have better work performance.

6. Commitment to professionalism and diligence while performing any services.

7. A book-keeper should not engage in activities that may be seen as a conflict of interest.

8. Book- keepers should obtain reasonable evidence or documentation to establish a basic for recorded transaction.

9. Book-keepers should not cause any distortion of facts during any Investigation.

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