Which Bookkeeping Service do you Need?

Bookkeeping is one of the most important processes in the accounting cycle. It is also one of the most commonly availed accounting services. It is the process in which the transactions, both income and expenses, of a business is recorded in the books of the company. Bookkeeping services for small business is very crucial as it would be impossible to do any accounting if skipped.

Only two types of bookkeeping are mostly used around the world. One is the single entry system, and the other is the double entry system. Let us discuss the differences between, the advantages and the disadvantages of them both.

• The Double Entry System

The double entry system uses the simple equation of accounting “Assets = Liabilities + Capital”. It runs on one of the main principles - “two-fold effect”. The two-fold effect states that for every value received (debit), there must be a value given up (credit).

In double entry system, it is necessary that an accountant has the skill necessary to determine which elements are affected by a business transaction, and the effect or effects of the transaction on said elements.

• The Single Entry System

This is the most basic type of accounting. The bookkeeper needs to record transactions in a one sided manner. It does not need a trained professional for it to be done.

This means only the effect on a single element is recorded for every transaction. For example, only the effects on the cash account are recorded for all the transactions conducted by the business. It is way easier than the double entry.

Both the types have their own advantages and disadvantages. While it is easier to understand the single method system, the double method is much more accurate though it takes time and professional efforts. At the same time, the cost to maintain is higher for a double entry system than a single one.

Know your business needs well and thereafter go for the type of bookkeeping you require for your business. At Gangaaur Accounting Services, both the types of bookkeeping methods are offered by the professionals. Contact www.gangaauraccounting.com for any kind of accounting services you need for your small or medium business.