Introduction
The process of recording and organizing a company’s financial transactions depend
on certain individuals who are tasked to ensure that the organization remains responsible
in making informed decisions and compliant with the laws and regulations revolving
around the business.
To ensure this goal, companies hire bookkeepers or accounting clerks who
meticulously track all their financial records. As professionals in the field, you will provide the
baseline organization for income and sales targets, as well as all financial data needed for
strategic decision-making. To do this, it is crucial to develop your skills to maintain the accuracy
and reliability of financial records and manage cash flows, aiding in the prevention of fraudulent
transactions.
This lesson will equip you with the foundational knowledge that will help you to fulfill your
job as a bookkeeper/ accounting clerk
Topic 1: What is Bookkeeping?Bookkeeping involves the systematic recording and
categorizing of all financial transactions undertaken by a business (or an individual). It
involves documenting and monitoring by compiling this data into reports to show the
company's financial performance. If arithmetic is the fundamental aspect of
mathematics, bookkeeping is a fundamental part of accounting.
A bookkeeper (or book-keeper), also called an accounting clerk, refers to a person
who keeps the books of an organization of the business. For a large company with
substantial assets, revenues, and a large workforce, hiring a bookkeeper is essential
for organizing the company's financial records. This ensures that big companies can make
business decisions easily and produce financial statements for all stakeholders, knowing that
they comply with company policies and legal regulations.
For a small company, bookkeepers are also crucial for its smooth operation. Owners hire
bookkeepers to organize, store, and analyze their company's financial information, thereby
reducing their workload. They benefit from having a bookkeeper who ensures accurate financial
records, enabling informed decision-making and financial planning. Bookkeepers in small
businesses handle tasks such as invoicing, payroll, and tax preparation. Their expertise helps
owners stay compliant with financial regulations, avoiding penalties and allowing them to focus
more on business growth rather than on their company's financial status.
Topic 1: What is Bookkeeping?
History of Bookkeeping
The origin of bookkeeping dates back to a few centuries in the past. Although it is a relatively
old process, the accounting industry continuously develops regulations to ensure a more
updated and modern approach to the process.
In the presentation below, you will learn about the history of bookkeeping, and the figures
involved in its development. Click the "i" button to know more:
Topic 1: What is Bookkeeping?
Laws and Regulations
In every generation, business mirrors the growth of the economic development and innovations,
the use of technology is recommended when organizing financial transactions for easier
recording.
To protect the data of every user the Data Security and the Data Protection Act 1998 was
implemented.
As a bookkeeper you should familiarize the following legal obligations and regulations.
Although there are several laws and regulations that govern the profession, below are some of
that each bookkeeper must take note of:
Section 24. Penalty for Making False Entries for Writing False or Fictitious
Names in Book or Records
o Anyone who makes false entries or uses fake names in their books or records, or
helps others do so, can be punished under section 355 of the National Internal
Revenue Code. Penalties include a fine between P500 and P5,000, imprisonment
from six months to five years, or both.
o Anyone who fails to keep their books or records in a native language, English, or
Spanish, or doesn't accurately translate them into one of these languages, will be
fined between P2,000 and P10,000 or imprisoned for two to six years, or both
Section 25. Penalty for Violation of Other Provision of These Regulations
o Anyone who violates these regulations without a specific penalty in the National
Internal Revenue Code or other laws will be fined up to P300, imprisoned for up to
six months, or both, according to section 352 of the Code
o Topic 2: Roles and Responsibilities of a Bookkeeper
o Bookkeepers gather the essential materials for financial statements by
meticulously recording data into the accounting system. This can be done manually,
using worksheets, or by leveraging various accounting software
options available online.
o Bookkeepers are record keepers, however, their role goes beyond simple recording, they
are essential for maintaining and organizing a company's financial
transactions. Although bookkeeping is a process under the field of accounting,
bookkeepers and accountants differ in their fields of expertise.
o Topic 2: Roles and Responsibilities of a Bookkeeper
o Bookkeepers versus Accountants
o Although bookkeeping is a process under the field of accounting, bookkeepers and
accountants differ in their fields of expertise, as well as in their tasks. While a bookkeeper
is in charge of recording transactions, an accountant is involved in analyzing and
documenting financial data with a need for analytical skills and subject
expertise. They analyze the company's financial situation and provide necessary
information to the appropriate stakeholders.
o Below are the similarities and differences between a bookkeeper and an accountant:
TOPIC 3: Accounting FieldAccounting is considered as the process that involves
the recording of various financial transactions involving varying entities. It is
identified as a rapidly growing field focused on preparing, reviewing, and analyzing
various financial information for individuals, businesses, and organizations.
In this field, bookkeepers play a critical role in a company, as every transaction, income
and expenses recorded, provides the foundation to create critical analysis. By ensuring
accurate and complete data, bookkeepers/accounting clerks can directly support
informed business decisions and success in a competitive market.
To equip you with the knowledge need to keep up in its sector here are the following
fields of accounting
B. Bookkeeping in an Organization
Bookkeeping falls under the large scope of the accounting field. It is an accounting
process that ensures all financial records and transactions of a business are organized.
Typically, bookkeepers are hired to take on this responsibility in a company or a firm.
Usually, bookkeepers are under the supervision of the accounting manager, or
the senior bookkeeper itself. Below is an example of an organizational chart of an
accounting firm: