This is the most basic accounting function. It involves daily tracking and recording of ALL sales and expenses. This basically means capturing of all transactions and ensuring that financial records of businesses are up-to-date.
This is the monthly report that shows the total revenue generated by the business, total cost expended and the profit or loss thereon. This report is vital because it helps businesses to look through and thoroughly in order to make informed decisions. For instance, reports like this can help businesses to know if they need to improve on their marketing, reduce certain expenses or even tell if the business is profitable.
This helps with analysing cash flow. It also involves agreeing and reconciling bank accounts with the books as well as ascertaining all bank charges.