Bookkeeping vs Accounting – What’s the Difference?

Definition of bookkeeping and accounting

Bookkeeping focuses on recording and organizing financial data. Accounting is the interpretation and presentation of that data to business owners and investors.

How Bookkeeping Helps Your Business?

Maintaining a general ledger, which is a document that records the amounts from sales and expense receipts is one of a bookkeeper’s primary duties. Ledgers can vary in complexity from a sheet of paper to specialized bookkeeping software or apps.

These are some typical bookkeeping tasks:

• Recording and categorizing financial transactions
• Posting debits and credits
• Producing and sending invoices
• Maintaining and balancing subsidiaries, general ledgers, and historical accounts
• Completing payroll
• Recordkeeping

Here are a few to consider:

• Organizational services: Bookkeepers can help you track and organize your financial documents and reports. They will already have detailed, compiled records of your business to reference.
• Lower cost: Hence, bookkeepers typically charge lower fees for their services than accountants. The specific amount varies based on the amount of filing and documentation you need.
• Direct assessments: While accountants provide detailed analyses, a bookkeeper can give you a straightforward look at your business’s financial standing (easier to understand) Accountants, on the other hand, can offer estimated or biased analysis.

Do you need an Accountant?

An accountant analyzes the financial data a bookkeeper records and provides business owners with important business insights and financial advice based on that information. These are some typical accountancy tasks:

• Preparing adjusting entries
• Preparing financial statements
• Completing income tax returns
• Financial analysis and strategy
• Tax strategy and tax planning
• Financial forecasting

The accounting process produces reports that bring key aspects of your business’s finances together to give you a complete picture of where your finances stand, what they mean, what you can and should do about them, and where you can expect to take your business in the near future.

Here are the summary of what are the differences of bookkeeping and accounting:

If you’re a micro or small business, you can always opt for our 100% free, easy and reliable Bookkeeping app, WhyQ KiraKira. It has all the basic functions in terms of recording daily transactions, managing stocks and generating simple sales reports for your business.

Need more ideas & insights to grow your business, read WhyQ blog now.