Understanding the Importance of Bookkeeping

Understanding the Importance of Bookkeeping

Not all bookkeeping is what the account crew from the legendary series The Office was doing. Sitting in the corner, not very exciting and just mumbling some numbers here and there, that is the stereotypical image of a company accountant. To most people – that sounds dull and not something they could see themselves doing.

On the other hand – managers and small business owners can be obsessed with the matter as they have to have firsthand experience with those exact numbers. Not only the people managing it, but the entity of the company is, in a way, expressed through what the accountant has to say about the business. These, and many more, are reasons why bookkeeping should actually be placed on a pedestal and understood by everyone, even if it bores them to no end.

Who Needs Bookkeeping?

The practice of writing down the pluses and minuses of your daily production and trade is as old as written scripture goes. Not only is it too much for us to remember all the numbers, so we have to write them down, but we also need a system of comparing them later on to see what changes are happening. As our civilization and economies developed, so did our need for writing down numbers.

The Australian government has several legislations concerning bookkeeping. It is easy to get lost in this field of official bodies and boards, all demanding certain paperwork and a share of your profit, so patience and concentration are needed. If you are a business owner, however small or large, you will have to regularly submit all of those papers and, if, for nothing else, that is already reason enough to keep track of everything. Not to mention that you will need to have an overview of your numbers if you want the company to succeed.

Accounting in the Digital Era

Most developed countries are quickly moving away from the outdated system of keeping track of everything on paper and going digital. And why shouldn’t we? It is easier and more eco-friendly. 

The same practice goes for companies. It is in the best interest of any entity that important documents can be easily found and are readily available. Using Xero bookkeepers or other handy bookkeeping apps you can not only manage accounting almost by yourself (as opposed to having to outsource it) but you can also carry it on your smartphone with you. A very handy thing when going to business meetings and having to show some hard numbers to colleagues or potential investors. 

How Difficult Is It?

We don’t call it a white-collar job for anything. Even though this is a very physically easy job – you are sitting most of your working hours, you don’t need to carry anything heavier than some papers, it is usually in an air-conditioned office, etc, it still has many challenges.

For starters, it is mentally demanding. Having to calculate and keep track of many rows of numbers at the same time is something our brain wasn’t evolved to do and it is straining for us. Although most accounting can be done using only a lot of basic algebra, for some reports or projections you would also need to know calculus – and that is considered advanced mathematics. Most people without proper education will not be able to get a hold of it, a reason more why accounting apps are becoming more and more popular.

The job also has some physical downsides – our modern sedentary lifestyle is only emphasized by jobs such as those, and having to look and read on a paper or a screen for a long time is detrimental for one’s eyesight in the long run. And so far – we don’t have proper solutions for those problems. 

The Bookkeeper’s Corner

The classical accountant will always have to have with them a stack of supplies to do their job elegantly. These include, but are not limited to:

  • Various papers (white, post-it, letter quality, etc)
  • Pens (both colored and graphite)
  • Calculators
  • Staplers and pins

A separate workspace where they can work in peace is also recommended, though it is usually unobtainable in smaller companies. Either way – as the supplies needed are not in themselves expensive they should always be provided, as the bookkeeper is one of the most important people in any business and their work mustn’t stop for that.

Understanding the Importance of Bookkeeping

Instead of wondering what your next move as a company owner should be – have a look at the books and they will tell you everything. Knowing how to write them is only one side of the coin, the other is knowing how to interpret them, but that is also why a bookkeeper, or his digital counterpart, is one of your best friends in the pursuit of profit!