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Below you will find commentary on an 8 slide presentation that goes into the 5 Step Bookkeeping Process as it is experienced in ZAP Accounting Software's Bookkeeping Module.
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There are currently 2 introductory slides, one slide for steps 1 through 4 and two slides for step 5.
5 Step Bookkeeping - Two Introductory Slides
Introductory Slide # 1
"The Double Entry Accounting System" is best thought of as a single data table that is used as a 'Score Keeping System' for the Game of Commerce. Every single event like a purchase from Amazon or a Pizza Business gets recorded across two data rows, not one, with Software doing the repetitive work these days!".
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Introductory Slide # 2
The difference in handling between Asset and Liability Journals and the General Journal comes into view, along with the Transaction Aggregator, the General Ledger, the Income Statement and the Balance Sheet too.
Step 1 - Review Prior Work
Step 2 - Record Transactions "Accurately"
Step 3 - Categorize Transactions
We have something far better than "memorized transactions".
Sort your journal by Payee. Similar Payees are now grouped together and you can drag categories to all transactions that apply with a single move of the mouse.
There is no faster way to do this.
The power of the spreadsheet is really on display here. The time savings is startling.
The transaction categories flow in real time from Journals to our "Transaction Aggregator" and on to the "General Ledger" without the potential for data loss or corruption of a database system.
If the Balance Sheet is turned on, you can watch updates affect it in real time.
Step 4 - Review the Income Statement
The Income Statement is created from the General Ledger Records. The General Ledger has debit and credit cross check reporting that can be run for all time periods or time period subsets to ensure integrity. The important thing to understand here is there was/is no 'hand off' of records. All this data resides in the Journals and has simply been repurposed for this reporting. Thus the idea of "computer error" is generally non-existent.
Step 5 - Review the Balance Sheet
We take a slightly different approach to the Balance Sheet.
There are no "sub reports" related to equity or Net Income. All of those values are presented directly on the Incremental Portion of the Balance Sheet for Transparency.
Given this data is all created from the General Ledger, which is created from raw data in Journals with only a change in perspective, nothing can be lost. A change in a Journal is reflected here immediately. Stepping through a balance sheet by day to find errors is simple work.
A months worth of Credit Card Transactions can flow through the process in 5 minutes. Ten minutes if you are getting side tracked. The same for a checking account and every child leaving 8th grade should know how this works.
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