What is the difference between Bookkeeping and Accounting?
Bookkeeping and Accounting are 2 very important and necessary pieces of your financial business health. They can appear to be the same thing to the untrained eye. I will try my best to simply explain the two to you.
Bookkeepers can keep books but they can't be accountants. Accountants can keep books and be bookkeepers and account for financial records but you rarely ever see accountants acting as just bookkeepers.
Bookkeepers = Record
>Track and record (classify) and organize financial transactions on a daily, weekly or monthly basis.
>Connect bank/credit card feeds to the accounting software.
>They ensure the books actually balance.
>They use some type of accounting system software.
>Their objective is to keep the records of all financial transactions proper and systematic. >Bookkeepers don't require any skill sets or degrees but don't just take my word that you should be hiring a bookkeeper who does have a number of certifications, qualifications and experiences.
>Process expense claims.
>Manage accounts receivable and accounts payable.
>Post journal entries.
>Provide information in a report format for analysis by the accountant.
>They are required to be accurate in their work.
>They are usually overseen by accountants.
>Bookkeepers have some knowledge of the law but are not considered experts.
>Prepare all accounts for accountant.
Accountants = Responsible for all accounting processes.
>Interpret, analyze and record financial data.
>They too use some type of accounting system software either online or on a desktop.
>Their objective is to gauge the financial situation and further communicate the information to authorities or the business management/owners.
>Accountants require some type of degree, experience and certain skill sets.
>Produce financial statements and tax returns that are in compliance with the law.
>Accountants with experience and education can obtain the title of Certified Public Accountant. (CPA)
>Accountants are considered experts in tax law.
>Can legally audit accounts.
>Prepare adjustment entries.
The role of bookkeeping and accounting can vary from business to business. Hopefully now, you have a better understanding of the two roles. They are quite different, aren't they?
To learn more about how bookkeepers or accountants can help you, schedule a call or an appointment with them. Of course, H&R Bookkeeping will be glad to answer any of your questions.
Schedule a "Discovery Call" with us today.