When many people think about bookkeeping and accounting, it is easy for these two things to be considered the same thing. While they may have their common goals, they play different roles to support a business. It is important to understand the differences between the two as a business owner. Propel Your Accounting is here to talk about the difference between bookkeeping and accounting and the roles that each of them play in a successful business.
The Function of Bookkeeping
Bookkeeping is an essential part of any business. It is the process of keeping financial records on a daily basis that are accurate and thorough. This is the part of business where financial information is gathered and recorded. A big part of bookkeeping is maintaining the ledger. This is a document that roughly lays out the amounts of sales and expense receipts. The complexity of bookkeeping will often depend on the size of the company. Larger companies are going to have more transactions. Here we would like to take a closer look at what bookkeeping entails for a company.
– Record financial transactions
– Producing invoices
– Posting debits as well as credits
– Preparing financial statements including balance sheets, cash flow statements and income statements
– Maintaining and balancing historical accounts, subsidies, and general ledgers
– Completing payroll
The Role of Accounting
Accounting is often referred to as the language of business. It involves using the financial data that was collected through bookkeeping to produce financial models. There is more number crunching and analysis taking place on the accounting end of things. Accounting can have a big impact on business decisions and ways to growth the company. Accountants often help business owners with tax planning, financial position analysis, and forecasting. Here are all the elements that accounting is comprised of:
– Preparing the adjusting eateries
– Reviewing all the financial statements prepared by bookkeeping
– Analyzing the cost of operation
– Completing tax returns
– Consulting with business owners regarding the impact of certain business decisions
Bookkeeper & Accountant Credentials
While there might be some work that overlaps between bookkeepers and accountants, the training and certification is quite different.
– Bookkeeper Credentials: There aren’t any formal credentials or certifications to be a bookkeeper. They are focused on accuracy but are usually overseen by an accountant.
– Accountant Credentials: For the most part, to be an accountant, you need to have a bachelors degree in accounting. There must be experience as well as education involved in becoming a certified public accountant (CPA).
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are a small business that is in need of bookkeeping services as well as accounting services, you can turn to Propel Your Accounting to help. We provide our clients with both bookkeeping and accounting services for that are in need. It is our goal to help you reach your potential as a thriving business. Call us today!
