![]() ![]() Whereas a bookkeeper is in charge of handling where the money is coming from and where it is going out, an accountant takes care of all the remaining aspects of the finances. The major differences between these two practices lie mostly in the tasks they accomplish and the skills and expertise that are required to do so. See Also: Accounting 101 for Small Business Owners Accounting vs Bookkeeping: What’s the Difference? In their need of strategic financial guidance, a business owner will always turn to an accountant. Unlike a bookkeeper who is only limited to carrying out his role, an accountant can assume the position of a bookkeeper if there isn’t one available. ![]() They provide estimation for forecasts, industry trends, and prospects for future growth and guide the owners on where to take their business next. Analyzing and projecting financial successĪccountants also prepare financial reporting forms such as tax returns, revenue statements, and balance sheets. Some everyday accounting responsibilities include: Proper, detail-oriented accounting helps the business owner grasp the actual state of their business’s cash flow and how it can be improved so that it results in increased profitability. They are required to break down complex information into simple terms and present it to business owners so that they’re able to understand the current financial standing of their business more clearly.Īs bookkeeping is largely focused on transactions, accounting focuses on generating reports that help bring important financial indicators together. An accountant analyzes the data collected by the bookkeeper and extracts financial insights and business advice from it to present to the business owner. What is Accounting?Īccounting comes with a wider set of obligations and consists primarily of financial reporting. Some other responsibilities of bookkeepers include preparing and filing VAT returns, sales tax, chasing clients for payments, filing and handling documents, processing requests for expenses, and more. They need to be consistent with their records and ensure that there aren’t any vulnerabilities through which an error can slip in and ruin their books. See Also: 5 Ways a Bookkeeper Can Save You Money They must have a good head for figures and must be capable of traversing through multifaceted financial data and to make sure there is a concrete balance in the accounts of a business. To be effective in their job, bookkeepers are mandated to have professional expertise to understand how to categorize any transaction correctly in the different ledgers. Manage accounts receivable and accounts payable Process financial transactions and prepare statements Create analysis reports and debtor reports Record and calculate incomes and expenses ![]() By following upon these responsibilities rigidly, a bookkeeper is able to: Their primary responsibilities include making sure that every financial transaction is entered into the company database and recheck it regularly to ensure it is free of any errors or mistakes. What is Bookkeeping?Ī bookkeeper is responsible for accurately recording and updating all financial transactions of a business. Throughout this article, we’ll be delving deeper to identify the key differences between the role of an accountant and the role of a bookkeeper and analyzing in detail how the two professions stack up against one another in terms of their practicality and contribution to a business. Any entrepreneur person will need both accounting and bookkeeping services to track the financial performance of their business, regardless of whether they’re running a startup or a full-fledged, international company. Some people choose to do it themselves, while some hire bookkeepers or accountants to their team while others outsource it to professionals to do it for them. The work of an accountant builds upon the activities carried out by the bookkeeper and extracts financial insights from the data to provide actionable insights to the business owner. Bookkeeping involves recording financial transactions daily and making sure that all the entries are entered accurately in the correct ledgers. While their processes are much different, they both work to support a business throughout various stages of its financial cycle.įor one, bookkeeping covers the transactional and administrative side of business finances than accounting. Bookkeeping and accounting are normally used interchangeably, but they are quite different. ![]()
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