Types Of Bookkeeping Systems

Recording information for a business requires having a solid system in place. We know that keeping accurate records is important, and issuing reports is imperative, but what entry system will work best for your business?

Single-Entry System

The single entry system is an “informal” accounting/bookkeeping system in which a bookkeeper records each transaction only once as either revenue (deposit) or as an expense (check). Using this system, a bookkeeper generally records only the essentials, such as cash, accounts receivable, accounts payable and taxes paid, and includes a daily and monthly summary of cash receipts and disbursements. Because of the simplicity of this system’s nature, records of assets, inventory, expenses, and revenues may not be kept. Single-entry systems are usually inadequate except where businesses are especially simple and the volume of activity is low. An example of a single-entry bookkeeping system is a checkbook. The drawback of the single-entry system is that it does not provide a business with all the financial information needed to adequately report the financial affairs of a business.

Double Entry System

The double entry system is the standard and complete accounting system used by businesses because every transaction or event is recorded in at least two accounts. Recording a debit amount to one account and a credit amount to another results in equal credits for all accounts in the ledger. Since all business transactions consist of an exchange of one thing for another, double entry bookkeeping is used to detect and reduce errors. If at any point the sum of debits for all accounts does not equal the corresponding sum of credits for all accounts, a bookkeeper is able to catch and correct the error easier. This system is preferred among businesses with high-volume activity because of its thoroughness, and checks and balances.

What bookkeeping system do you prefer over the other? Do you implement both? Have you found any drawbacks to using one over the other? Leave your preference and reasons in the comments below- we would love to hear from you. 

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Preparing for a New Employee

I remember starting a new job once a few years ago. I was so excited to start that I went shopping for new clothes. On my first day, I got up early to look as professional as I could, but when I showed up, I was horrified to find that I had worn the EXACT same outfit as my new boss. Both the shirt and the slacks were identical. Now, we can’t guarantee to save your new employee from having some embarrassing moments on his or her first day, but we can give you some tips on preparing your office to welcome them and make them feel more comfortable. 

Prepare the Workspace and Environment

We like working in office spaces that are open, without desks clustered together. When employees sit out in the open with their team members, they feel more of a part of something big instead of an exclusive limb left off somewhere.

Welcome and Equip New Employees for Success

Equip your new employee with a welcome packet of sorts- include a history of the company, a mission statement, goals, values, and maybe some press releases or media attention. Let them know important things like where the restrooms and cafeterias are, a list of other employees and team members or who they can go to for answers to certain questions. I would have liked to have a map of everyone’s work spaces and offices to avoid other embarrassing work situations, but that is for another blog! Allow your new employees to know when important weekly meetings are, and what they can expect in their first days or weeks, as well. This takes away some of the anxiety that comes with unfamiliar places and customs.

Train Team Members Together

If you are hiring more than one person at a time, it is a good idea to have them start at the same time. This provides an immediate opportunity for new employees to create a relationship with someone they can identify with (each other) and it helps them feel a little more integrated when they aren’t “the only ones”. This also allows trainers to work with more than one person at a time, making this process cost- and time-efficient.

Establish Expectations and Responsibilities

This part isn’t much fun, but it is a crucial element in both individual and organizational development, establishing a foundation for future success.

A new employee should feel welcomed, and comfortable, but once they are in the door, it is time to work! Make sure to take the time to establish all of their responsibilities- daily, weekly, and monthly. Make sure they understand deadlines, who they report to, what their exact job description is (if it was not discussed in detail before), and current processes. Let them know whether a process is open for improvement or customization or if a process must not be changed. Some team members like the ability to be creative and find solutions, but some bosses prefer that processes stay the way they are unless discussed. (I learned this the hard way years ago.)

Integrate Newby’s with the Team

A developer at Warby Parker created a little program called “Lunch Roulette.” After each weekly team meeting, this software application randomly selects two groups of four people to go to lunch on the company’s tab, so that no more than one person from each department is in a group.

Other companies hold “team-building” meetings where they are all encouraged to work together to solve problems or mysteries. These can be fun! Often times, companies will rent a space for team-building games every few months so that new employees get a chance to bond with their co-workers, and existing employees have the opportunity to strengthen their bond.

We would like to hear your stories and tips on how you integrate new employees into your business. What has and hasn’t worked for you? Leave your comments below or shoot us an email at info@journeybookkeeping.com. We love to hear from our readers!