Many people may think that bookkeeping and accounting are the same thing, however there is a difference between the two tasks, and this article will explore the key differences. Both bookkeeping and accounting share some common goals, and both support a business in different stages. If you are to compare both functions, one can find that both are important to manage a business financial aspect.
What bookkeeping and accounting typically consist of:
- Invoicing and recording payments
- Recording payments and expenses
- Categorising all transactions
- Posting debtors and creditors
- Payroll processing
- Prepare documentation for the accountant
- Analysing and reporting accounts
- Management accounts
- Financial statements
- Budgeting and forecasting
- Tax planning and tax returns
Bookkeepers and accountants sometimes do the same kind of work or occasionally also tend to overlap, but generally they have different tasks assigned to and a different skill set, studies, and background experience. Whilst the bookkeeper’s role is to record transactions and keep books organised, the accountant can provide you with consultation, analysis, and tax advice. The role of a bookkeeper is more of a clerical nature, whilst that of an accountant is analytical.
Staying on top of your finances is a surely key part of having a successful business. Accurate bookkeeping and accounting contribute directly to long term success of a business. Your financial data must be always up to date and accurate, to have an overview of your financial situation. And as your business grows and become more challenging, keeping track of your finances is even more important.
Some business owners learn to manage their finances on their own, while others opt to hire a professional so that they can focus on the parts of their business that they really love. Whichever option you choose, investing — whether it is time or money — into your business financials will only help your business grow.
Some businesses opt to hire in-house professional bookkeepers and accounting staff, others tend to manage bookkeeping on their own, and then there are those who opt to outsource completely this function. If you are looking for a professional firm to take care of your bookkeeping and accounting, do not hesitate to contact us: +356 2704 0903 / email@example.com.
Article written by Charlene Sciberras and originally published here: https://fairwindsmanagement.net/bookkeeping-vs-accounting/