What is Bookkeeping?
Bookkeeping is essentially a very broad word that means “the tracking of everything that happens in your financial books.”
Bookkeeping started when monks kept records in books a long time ago. Every time money came in, they entered the income in one account book, and in another account book, they wrote from which account it came out of.
Hence, the name “Book keeping”.
Nowadays we don’t have to write it down in books, we can just show in our bookkeeping software like QuickBooks, that money came in or went out from a bank account, and what it was used for. That is why double-entry bookkeeping is called that – each transaction had to go into two books.
The main purpose is to track all expenses and income and every financial transaction. Then, at the end of each year, you have it all organized for your tax reporting.
These days Bookkeeping also includes other entries, depending on the level of service desired.
You can enroll in a payroll service; enroll in AP service where your Bookkeeper tracks or even pays the company bills; the Bookkeeper can send out invoices to your clients; help with tax compliance, such as 1099s, local business taxes, and sales tax.
Pretty much anything that you would do in your company that has to do with financial matters for your company can come under bookkeeping services.