Data entry is the foundation of everything else in bookkeeping and accounting. You need to enter the right numbers into the right accounts to truly understand how the business is doing.
What is data entry?
As the name implies, data entry is the process of recording financial transactions – money coming into and going out of the business.
Why does it matter?
If you’re not keeping a close eye on money in, money out, and things like debt, you’ll soon lose sight of how viable and profitable your business is.
How to do data entry
For each sale or purchase, you generally want to:
1. Record details such as:– the value and date of the transaction– who it was with (though that’s not always necessary for retail sales)– what was bought or sold
2. Assign that transaction to the right account in your ledger.
Purchases and sales data are often lifted from places like point-of-sale systems, business bank statements, invoice records, and receipts. You’ll probably need multiple sources to get all the information you need.
Modern bookkeeping data entry
Nowadays you can bypass a lot of the manual data entry by linking all your business systems together so that information flows directly into your books from sales systems, bank accounts, and receipt scanners.