What is bookkeeping?
Bookkeeping is a systematic and accurate registration of the transactions you make in your company. You must post both when buying and when selling. Bookkeeping is used to keep track of the finances of the company, both so you know what to pay in VAT when you need it, but also so you can prepare your annual accounts every year, and get an overview of income and expenses.
In the old days, when one did not have bookkeeping and accounting systems, companies had a big book where everything was written down. Hence the term "Bookkeeper Ajax". Now, however, it is made faster and easier with the aforementioned systems.
Who posts?
Bookkeeping can either be done by yourself, or it can outsource to an accountant or an accounting firm. The title “accountant” is not protected, which means that everyone can actually call themselves an accountant. If you have to post, however, it is necessary to know something about the VAT Act and VAT rules, as when registering you register what has come in from sales VAT and what you have paid in purchase VAT.
Some companies have internal accounting, but these are usually only larger companies. Many small and medium-sized companies choose to outsource this process, as it can be time-consuming if you do not have 100% control over all rules and laws regarding VAT, tax, and accounting.
Why should you post?
It is important to post for several reasons. The first is that it is necessary for traders to have control of the accounts. If you do not have it, you can not know what to pay in VAT and in tax when the time comes for this. By posting, you can get an overview of what you owe, what you owe, or what value your business and assets have.
It is also important to post, as it is necessary as a company to have documentation of purchases and sales in the company. Again, this is for VAT accounts and annual accounts. Without documentation, you can not get the VAT back, and at the same time, you will not be able to deduct expenses in tax when this is an option. Therefore, always remember to save your vouchers.
Accounting and accounting system
Nowadays, it has been made much easier to book, with the many bookkeeping systems available. These systems make it possible to scan documents, easily sort and quickly enter the necessary information.
One thing to remember, however, is that when posting, remember to post it under the correct entry - and it is not always that this is available. For example, if you have bought software from abroad, you can not write it under EDB with VAT, as you will not necessarily be able to get the VAT back. Therefore, remember to make sure that the correct entry is created in the system. If this is not the case then maybe your account needs to be created.
Double posting
Double posting means that every time you post a transaction, it has to be posted twice. Once in credit and once in debit. It has to be done because there must always be balance in the book.
Duplicate accounting is not a requirement under the law, but it has gradually become a standard as it is an easier way to keep track of accounts.
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