What Is Bookkeeping ? In a manual accounting system, after creating the transaction journals, the transaction values are posted into ledger by the end of the period for each account. For example cash ledger is filled out based on a transaction journal related to cash account. The final form of the ledger will be similar to the bank account or savings account.
The benefits of bookkeeping for contractors :
The benefit of bookkeeping in managing contractor business:
- Monitor the financial progress
- Financial control
- As a tool to evaluate the goals/objective achievement in business activities
The bookkeeping for contractors principles:
- Systematic: journals are en tried based on the determined method according to the journal types.
- Chronological: journal is filled according to the transaction sequence
- Informative: understood by all interested parties.
- Accountable: journals are filled to meet the accounting rules, such as calculable, can be evaluated, and accountable
- Auditable: financial records are easily checked. In preparing the journals, the group must refer to the above mentioned principles, orderly, correct, and useful.
What is contractor business?
Contractor business may be defined as the person or business entity that receives the job and conducts the work in accordance with the cost specified in accordance with the drawing of plans, regulations, and established conditions (Ervianto, 2002).
During the business operation, the contractor business needs the specific information related to the project. The reports needed are:
- Project budgeting
- Profit/loss
- Payable and receivable
- Asset
Contractor business must keep the record of how much clients owe then and how much money the company owe to suppliers. Bookkeeping for contractors should be conducted on daily basis which the transaction are entered regularly. Of course it needs discipline to ensure that no transactions are missed. Mistakes in bookkeeping will cause serious problems, such as estimating job cost, paying bills, or receiving customer payments. The error occurred will not only influence the financial performance but also finishing the project.
