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Financial ManagementBook KeepingBook Keeping: It is very clear from this term that ‘Book Keeping’ is ‘keeping of books ‘ in a proper and systematic way (here we are talking of books related to organizations accounts related)
i) As a first step we need to keep all the information related to any transaction at one place and we need to give some information on a piece of paper where we need to mention the details of transaction. This we call a ‘voucher”
ii) Once this voucher is prepared and approved by an authorized person in the organization, this needs to be written in primary books i.e. Cash Book and Journals.
iii) The next step is for us to segregate the information from the Cash Book and Journals so that a particular transaction goes to their respective accounts – for this we maintain Ledger Books iv) Once the above is done, we will be able to know at any point of time as to how much money is utilized in any particular head and what balances are available. This is also called a Trial Balance’ When we maintain manual books all the above needs to be done individually.
However, now a days most of the organizations are using the Computerised Accounting Packages. In this case, once one enter the voucher, we can get the rest of the information automatically. This again depends on what sort of accountancy packages one is using and what facilities that package has.
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