The two terms, bookkeeping and accounting are commonly used as business functions. Although they are used interchangeably, they are actually very different from each other. On one hand, bookkeeping involves the recording of all transactions in a business, and on the other, accounting is the inspection of the accounts in their final form.
Bookkeepers are to record any transactions in an orderly form, therefore their work is most desk work. Whereas, accounting focuses on the interpretation of any financial transactions that are recorded in the account. These days, bookkeeping is all moving onto cloud accounting. This is why some small company’s bookkeepers also do accounting tasks like summarizing financial data. These multi-skilled people are known as full charge bookkeepers and even receive a higher salary. A good example of this service is Shmunky bookkeeping services.
Bookkeeping revolves around identifying, measuring and recording transactions of financial statements. Other than recording transactions in an orderly fashion, bookkeepers are also involved in the reconciliation of the bank’s statements. Some skilled bookkeepers also provide the service of financial analysis. In this, your company’s account will be thoroughly gone through to find trends that might help your company is cash flow decisions.
Bookkeepers prepare journals along with financial statements like; income statements, balance sheets and cash flows. This is all thanks to the cloud accounting.
The accountant checks all the files when the year ends; their main job is the make an analysis that will give the client an overall performance check for the year. But bookkeepers are able to give live information as the work is done. This helps you improve yourself accordingly.
Now that you know what makes these two terms different, it will become easier for you to decide which one you think is more important for your business’s performance.