An organization is involved in a lot of transactions. They are both monetary and non-monetary. The concept of bookkeeping was invented by a monk named Luca Pacioli. He is regarded as the father of accounting. But when we talk about accounting there are always two aspects to it. The concept of accounting began with the single entry system. So Luca Pacioli is the first person to invent the double entry accounting system that has the concepts of debit and credit. That is how double entry bookkeeping came into existence.
Bookkeeping is the process of managing the financial transactions of a business or any such establishment by recording, classifying and summarising the books of accounts of an individual or business.
But before we talk any further about bookkeeping, it is important that you understand that both bookkeeping and accounting are two different things.
Many people have accounting confused for bookkeeping. So we will quickly see the difference between accounting and bookkeeping.
Accounting is a broader process while bookkeeping is just a part of it. Every accounting process begins with bookkeeping. This means that accounting is incomplete, or in other terms, accounting itself isn’t possible without bookkeeping. While an accountant takes care of the accounting functions, there is a separate person called the bookkeeper to take care of the bookkeeping activity of the business. So to understand the functions of bookkeeping you simply have to understand the role of a bookkeeper in business.