Bookkeeping Basics

There are many complex elements to professional bookkeeping. Before you start learning how to do all the technical work, however, it might be a good idea for you to get a grip on some bookkeeping basics.

Bookkeeping entry systems

In bookkeeping, every business transaction – whether a sale, an expense, a loan or a pay cheque – needs to be duly recorded. This is what bookkeeping is all about. To make sure the financial records of a company are organised, standardised, accurate and consistent, bookkeepers use uniform entry systems when recording financial data. There are two entry systems generally used by bookkeepers:

• Single-entry bookkeeping
• Double-entry bookkeeping

Single-entry bookkeeping means putting an entry into an account book only once, either in the debit or the credit column. Double-entry bookkeeping means putting each entry in twice: once in the credit column of one account’s book, and again in the debit column of another account’s book. This is a way of double-checking and making sure no entries are missed or omitted.

Bookkeeping books

There are a number of different books, journals and ledgers used by bookkeepers. These include:

• Credit daybooks
• Petty cash books
• Journals
• Sales ledgers
• Purchases daybooks
• Payroll registers

Each of these is used for a different purpose. This ensures that all the company’s financial records are well systemised and ordered. All the different book formats can also be found in bookkeeping or accounting software.

Bookkeeping terms and terminology

Bookkeepers have a whole lexicon of unique professional terms they use. This includes general financial terms, as well as specific bookkeeping terms. Bookkeeping terms and terminology are mostly used in the form of abbreviations when recording financial transactions in books and ledgers. Here are a few of them, just to give you an idea:

• P/R (Payroll)
• Dr (Debit)
• Cr (Credit)

Here are a few more complex ones:

• CST (Central Sale Tax)
• AMT (Alternate Minimum Tax)
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)

Introduction to bookkeeping

Most bookkeepers start off in junior or clerical positions before they move on to becoming senior bookkeepers. This process helps to familiarise them with bookkeeping and helps them build experience and expertise in their fields. Even junior bookkeepers need formal training, however. Getting basic bookkeeping training will not only help you start your career in this profession, but will also help you decide whether you really want to work in this discipline. If you are a business owner, taking a basic bookkeeping course will also be very beneficial. It will give you more control over your own finances and give you a better understanding of your own company’s inner workings.

Where can I study basic bookkeeping?

The Learning Group offers accredited bookkeeping courses that vary in length, level of advancement and content. There are also numerous short courses in bookkeeping that you can take. We offer our courses through distance learning. This will allow you to study from home in your own time. You can even study bookkeeping on a part-time basis, if you prefer. This makes The Learning Group an ideal college for anyone who wants to get a good grip on the bookkeeping fundamentals, and maybe learn a little more (for more in-depth training, you can take a look at the advanced bookkeeping courses we offer).

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