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It is very important for businesses to really understand their accounting system. Businesses will pay thousands of dollars in fines if they fail to monitor their system. Intelligent entrepreneurs take this into account when planning their business moves.

Do you have any idea as to how bookkeeping and accounting departments perform their work? What do these people do on a daily basis?

If payments are received from customers, than accounting departments are responsible for recording those transactions. The accounting department has to make sure that the money is sourced accurately and deposited in the appropriate accounts. They also manage where the money goes. They also ensure that enough money is available for the payroll folks to disperse payroll checks. They also ensure that bills are paid, specifically payments owed to suppliers and financial institutions. A portion of funds should be invested,

Most people probably think of bookkeeping and accounting as the same thing. Bookkeeping is really one function of accounting. Accounting is considered a science, because it involves managing the overall affairs of the enterprise. Accountants prepare reports based, in part, on the work of bookkeepers.

One thing they do that?s terribly important to everyone working there is Payroll. It is a big job, but all payroll activities must be recorded and journalized in the company books for each and every employee. The payroll department has to ensure that the appropriate federal, state and local taxes are being deducted. The pay stub attached to your paycheck records these taxes. They usually include income tax, social security taxes plus employment taxes that have to be paid to federal and state government. There are other deductions that will usually be deducted on the pay stub. These included things like retirement, vacation, sick pay or medical benefits. It?s a critical function. Some businesses opt to bring in contractors to handle their payroll, while others use an on-line payroll service or maintain payroll departments.

Bookkeepers perform all manner of record-keeping tasks. Some functions are:

-They design and construct spreadsheets that outline entire business processes which are critical to the business ? the buying, selling, transferring, paying and collecting.

-Bookkeepers also make entries of the financial effects into journals and accounts.