Every successful business has its bookkeeping methods well sorted. The accuracy of financial figures offers crucial and valid insights into a company’s performance. However, what are the sources of those details? Bookkeeping practices survive and thrive on essential documents, including bank statements, financial statements, payroll documents, etc. These documents must be organized appropriately in the right place for quick recovery and reference. Otherwise, one can quickly lose essential information that may have helped during disputes or other scenarios. Since these documents are used internally and externally for various purposes, saving them in a safe but convenient location is necessary. Your bookkeeping process will benefit from them. Let’s find out about these documents once.
- Financial statements
These documents contain details of a company’s performance and financial position for internal and external teams to consider. Management accounts often use these documents to analyze business growth and prospects. Financial statements can be of different types, such as P&L statements, cash flow statements, and balance sheets. All three documents come in handy during the bookkeeping process for calculations.
- Payroll documents
Staff payment often forms a significant part of the business expenses. Hence, it becomes an integral part of the bookkeeping process. Any discrepancy or mishandling in this area can affect your workers’ salaries, wages, and, on top of that, their trust. That’s why one must be careful with these. If you are spread too thin, consider assigning the responsibility to bookkeeping consultants. For help, you can check Sound Advice Bookkeeping. Nevertheless, payroll information has to be precise and accurate, whether you delegate this work to an agency or an internal team.
- Bank statements
These financial documents carry the transaction summary of a business account against a specific period. These are typically monthly records. You check these documents to ensure all the figures add up accurately. During payment verification or reconciliation, these statements become a reliable tool.
- Transaction document proof(s)
Invoices, receipts, and other such documents belong to this category. You rely on them to authenticate a transaction against the amount, date, product, service, etc. These also help resolve any payment disputes. If you keep these sorted, error identification and estimation tasks become smooth.
- General ledger
It contains details of all incoming and outgoing transactions. You can add information to the book manually or online. No matter the method, this document helps classify and summarize all your company’s essential financial records. The ledger should be updated every time you receive an invoice or receipt. To organize everything efficiently, you can create different sections in the system, such as liabilities, assets, expenses, and more.
- Journal
The chronologically arranged transaction details help bookkeepers prepare the ledger. Journals should store all the transactions correctly by double-checking their authenticity.
Other documents may also be required for bookkeeping. Too much information, complicated figures, and transaction volumes keep you on your toes. It must have made you aware of the complexity of the bookkeeping function. If your internal team needs external support, please consider hiring an agency. Consultants can tailor their bookkeeping services to suit your company’s demands. At the same time, you can rest assured of getting quality work.