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How to do bookkeeping

When you do bookkeeping, you record the company´s invoices in an accounting system which then make up your accounting system.

In the old days, you would register a company´s invoices in a big book - hence the name bookkeeping. Today, you´ll often use an accounting program that is stored on your computer or you´ll buy access to an online accounting program.

Many do not have an accounting program, but send vouchers and invoices to auditors or accounting firms who then will do their bookkeeping.

What is bookkeeping

Bookkeeping is when you take an invoice and register the amount on the invoice in an accounts notebook. The accounts notebook is an integrated part of an accounting program.

Accounting program

An accounting system can theoretically be a manual system but today it will often be a computer program.

In very simple cases, a well arranged spreadsheet can be used for an accounting system but otherwise, the accounting system normally is an accounting program specifically developed for this purpose.

Practical bookkeeping

How bookkeeping is done will not be explained here, so please refer to instruction manuals from the different accounting programs.

Common to all the programs is that, when the transactions are entered into the system, you can extract important information about the company. For example:

  • Which customers have bought on credit and have they paid their bills?
  • How much you must pay in moms/VAT?
  • What the company has sold this year to date? Compared to the budget
  • What the company has in total costs

The accounting programs help find answers to these and many other questions.

Good input, good output - sloppy input, bad output

Remember that the information pulled from the accounting program is only as accurate as the information that is entered into the system.

5 Steps to usable information

Below, you see the 5 steps that give you useful financial information. Bookkeeping of the business transactions is the foundation for useful accounting.

Illustration of the ecomomic system in a business

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How to do bookkeeping
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VAT/moms rebate
Accounting software in Denmark
Daily transactions in bookkeeping
Daily routines in bookkeeping
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Help to marketing and sales
The law and your business
Focus on revenue
Hiring staff