Cracking the Bookkeeping Code

Lynn Fountain's Profile

Most professions have their unique terminology that professionals use when engaging in work processes.  For accounting and bookkeeping, terminology like debts and credits, T-accounts, accruals, amortization, depreciation, GAAP, GAAS, GASB  etc. can seem like a barrier to really understanding how to record and process certain transactions.

This situation is not unusual.  Think about the medical profession.  Years ago, doctors wrote their notes and diagnoses in charts that the patient rarely if ever saw.  Now, due to HIPPA regulations, most medical facilities and doctors record their notes and test results electronically and those records are made available to the patient through on-line portals.  When the layperson reads those notes, the information can send chills down your spine if you do not understand medical lingo  Another corollary is the legal profession and contract language.  As a non-lawyer, have you ever had to interpret a legal contract.  The task can be daunting.

We may all feel like learning terminology is akin to “spelling” and “reading” in grade school.  Remember when we had to learn how to spell and define a term.  Well, there are very good reasons for this task.  This was the first step in being able to advance in our educational process.

For accountants and bookkeepers, understanding terminology and how it relates to the duties of their role is key to being an effective and proficient professional.  Those seemingly “simplistic” terms must be understood in the context of how generally accepted accounting principles (GAAP) direct that transactions be processed and recorded.  They tie directly into how professionals will create an organization’s financial statements, which translate to allowing owners, shareholders and business owners to understand whether they are appropriately meeting business objectives.

Although bookkeepers are not necessarily required to have their accounting degree, it is essential they have a complete understanding of the elements involved in the accounting process.  Bookkeepers are responsible for some or all of an organization's accounts, known as the general ledger. They record all transactions and post debits and credits. They also produce financial statements and other reports for supervisors and managers.  Recent research indicate that methods of keeping accounts (bookkeeping) have existed since ancient times. Babylonian records written with styli on small slabs of clay have been found dating to 2600 BCE. So even with the evolution of technology, the profession of bookkeeping is one that has, and in some form, will continue to be important for a long time.

Bookkeepers can form the very backbone of an organizations accounting and financial processes.  Many of their duties may be directed or supervised by an accountant, however, having a strong knowledge of accounting concepts will allow the bookkeeper to become an valuable resource to their organization.  That is why educational protocols relating to bookkeeping processes are essential.

The Illumeo Professional Bookkeeping Certificate was designed as a stepping-stone for bookkeepers and accountants to gain a deep understanding and expertise in not just the unique terminology but also the advanced concepts of dealing with various accounting processes and creating financial statements. The program is chock full of core accounting and bookkeeping terms and processes, and it curriculum concludes with a detailed scenario allowing the participant to understand aspects of creating a legal entity, recording transactions and creating the financial statements.  All of these lessons provide the participant with advanced knowledge that allows them to exceed the expectations of their organizations.

To learn much more about how you can excel at bookkeeping, check out Lynn's Professional Bookkeeping Certification program on Illumeo.

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Lynn Fountain, CPA, CGMA, CRMA. Former Chief Audit Executive for two global companies, expert in leadersihp, SOX, COSO, ERM and corporate governance frameworks. Nationally recognized trainer, speaker published author.