Those unfamiliar with the industry sometimes use the phrases "bookkeeper" and "accountant" interchangeably. However, there are a few key differences between the two occupations. It's crucial to remember a few points while deciding between bookkeeping and accounting. By documenting transactions, maintaining accounts, and collecting financial data, a bookkeeper may assist you in managing your financial records.
These activities are referred to as bookkeeping. An accountant may then utilise this information to evaluate the financial health of the company and assist you in making data-driven business choices. A bookkeeper can be an accountant, however, an entry-level bookkeeper is not an accountant. Let's look at the distinctions between the two and how working with both bookkeepers and accountants may assist your business.
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What is bookkeeping?
Bookkeeping is the practice of recording and documenting all financial transactions made by a company from its inception through its closure. This not only helps to determine a company's financial outcomes, but also establishes a standard for precisely reporting where money is produced or spent. Bookkeepers maintain track of transactions using documents such as purchase orders, receipts, bills, invoices, or any other records that show a transaction occurred.
What does a bookkeeper do?
A bookkeeper is someone who maintains track of a company's day-to-day finances. This comprises transaction recording and general ledger management. They may or may not have a business or bachelor's degree. There are many excellent bookkeepers with years of experience who work successfully without a business degree. Good bookkeepers are structured, numerate, and meticulous problem solvers.
Common bookkeeping services and responsibilities include:
Recording daily transactions: Reviewing source documents and posting journal entries into accounting software.
Reconciliations: Reconciling bank accounts and reviewing the general ledger to ensure that financial information is posted to the correct accounts.
Delivering reports: This includes balance sheet and income statement
Closing books: Confirm accuracy by preparing a trial balance and ensuring that they are ready for tax time.
What is accounting?
Accounting is comparable to bookkeeping in that it includes the process of documenting firm financial activities, but it goes a step further. This is a more in-depth procedure that involves summarising, analysing, and interpreting financial data. Accounting also entails disclosing these discoveries to outside parties such as tax collectors and authorities. It is a procedure that reveals the financial narrative of your business, such as whether it is profitable or losing money, and which components of your firm are the most profitable.
What does an accountant do?
Accountants utilize the records provided by bookkeepers to examine the big picture finances and make sound company decisions. They also provide business owners and other stakeholders with financial insights and an overview of the company's overall financial condition.
An accountant’s duties might include:
Overseeing a bookkeeper’s work: This is done to ensure accuracy and to spot any errors as they occur. This also includes going through accounting transactions in the bookkeeping.
Managing the bookkeeping process: Accountants repair any clerical errors in bookkeeping and anticipate firm health based on these data.
Generating financial statements: Accountants make modifications to the trial balance and create the income statement, balance sheet, and cash flow statement.
Preparing tax returns: Accountants prepare the financial reports needed to file tax returns. Your accountant may prepare and submit tax returns to the IRS, or you can engage with a CPA business that does so throughout tax season.
Conclusion
This blog has discussed the differences between accounting and bookkeeping. Furthermore, the commonalities, work position, and needed Accounting and Bookkeeping qualifications are discussed. Accounting and bookkeeping are two distinct professions. They do, however, have numerous commonalities.
Many individuals believe that they are the same occupation. Hopefully, this article can help individuals who are confused about Accounting versus Bookkeeping. Furthermore, if you want assistance with Accounting Assignments, you may contact our professionals and obtain my accounting assignment at a reasonable cost.
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