Bookkeeping and accounting are two major functions for every business organization. In the simplest of terms, Bookkeeping is mainly related to identifying, measuring, and recording, financial transactions whereas Accounting is the process of summarizing, interpreting, and communicating financial transactions which were classified in the ledger account.
Bookkeeping and accounting may come out to be the same profession to an untrained eye. Because of both accounting and bookkeeping deal with financial data, require basic accounting knowledge, and classify and generate reports using the financial transactions. At the same time, both these processes are inherently different and have their own sets of specialist.
Bookkeeping is simply a method of identifying and recording all the financial transactions made on daily basis, whether it be from sales, purchases, expenses or payments & receipts. Basically, the process keeps track on company’s every financial activity. Main focus is on accuracy and less focused on interpreting the data and analytics.
Accounting, although, is rather a complicated process that works after basic bookkeeping. It handles everything including the part of summarizing, interpreting and analyzing all financial transactions. This is responsible for deciding on some critical money decisions based on the transactions made whole year.
It’s easy to get on with bookkeeping by recording all the finances day by day, but accounting sure needs an expert to look after. A person or an organization that doesn’t only make the accounting task go easy on you, but systemize the budget planning in a way that needs minimum investment, e.g. StartUp Efilings!
Being an entrepreneur yourself, it gets difficult on keeping account to almost everything. You cannot really be focusing on planning a success criterion, while also worrying about paying and filing taxes. This might seem like a plan, but you’d soon end up being nothing but, a bankrupt business person.
|BASIS FOR COMPARISON||BOOKKEEPING||ACCOUNTING|
|Meaning||Bookkeeping is process of recording the day-to-day transactions of the company in a systematic manner.||Accounting is a properly recording and reporting of the financial transactions of an organization for a particular period.|
|What is it?||It is the subset of accounting.||It is called as the language of business.|
|Decision Making||decisions cannot be taken, On the basis of bookkeeping records.||On the basis of accounting records decisions can be taken.|
|Preparation of Financial Statements||It’s not done in the bookkeeping process.||It’s a part of Accounting Process.|
|Tools||Journal and Ledgers||Balance Sheet Profit & Loss Account, Balance Sheet and Cash Flow Statement|
|Methods / Sub-fields||Single Entry and Double Entry System of Bookkeeping||Financial Accounting, Cost Accounting, Management Accounting, Social Responsibility Accounting, Human Resource Accounting.|
|Determination of Financial Position||Bookkeeping didn’t reflect the financial position of an organization.||Accounting shows the clear financial position of the entity.|
Hiring professionals might seriously prove beneficial to you with all the strategies and planning towards spending money mindfully. You’d not be worried about running out of the sources even while applying something new of a tactic.
Evaluating your business growth: Considering all the financial expenses and transaction made, it becomes easy on evaluating the growth of your business. Professional accountancy would bring you whole data on the number of sales, losses and profit made.
We do sure! As an online community, we always do our best in ensuring our client’s confidentiality and safety.
Both the accounting and bookkeeping plays an important role towards business. So, no matter whether you hire an online service or in-house accountant, you’d need him/her for long.
That isn’t necessary! All you need is for your bookkeeper to have an easy access to your books and accounting. So, how does it matter for one to be local or online?
It definitely is a great idea, but following this would lead you towards time wastage. You would end up focusing on accounts other than anything important.
Both of these approaches are important to business for it keep tracks on your money and how it is being spent.
. Bookkeping is a very important part of accounting. It is the process of recording business transactions on daily basis.
Bookkeeper is responsible for preparing four types of financial statements: - Income statement, Balance sheet, cash flow statement, statement of changes in equity.