What Is The Difference Between Bookkeeping As Well As Accounting

What Is The Difference Between Bookkeeping As Well As Accounting?

It is common for people to confuse bookkeeping and accounting. This is understandable since the two are inextricably linked to one another. Accounting is dependent on bookkeeping, and both help in the growth and survival of your company.

Tax and Law Research Inc. experts can help you maintain and manage your company’s health.

What Is Bookkeeping?

Bookkeeping is the day-to-day administration of your company’s financial information, specifically transactions. The kinds of transactions that your bookkeeper records will include:

  • Processing of payroll
  • Spreadsheet Updates
  • Bank statement reconciliation

In essence, this service is focused on the collection of data and organization and, therefore, when an accountant comes into the room to review your data, the information you provide will be ready to assist them.

What Is Accounting?

Your business is heavily dependent on accounting since it directs your company to success. Accounting is the next step following bookkeeping. Business owners receive advice on increasing their profits and improving their business.

To ensure that your business is successful, accountants must prepare quarterly or monthly reports based on the financial statements that bookkeepers compile to determine the condition of your company. Accounting also involves the creation of reports and statements, which are then delivered to banks and other government agencies.

You might not know that accountants have much work on their plate when they have just one client. They look over your financial records and perform:

  • Interpretation
  • Classification
  • Analysis
  • Reporting
  • Summarizing

A certified public accountant (CPA) can be described as an accountant who has the license to offer professional services in public accounting. CPAs and accountants as a whole are also able to advise you on taxes and help with tax planning.

What Are Bookkeeping And Accounting The Same?

Since services are often inextricably linked, they are often mixed. Here are a few reasons for this:

  • Bookkeepers and accountants handle financial data.
  • Bookkeeping is a skill that requires knowledge of accounting fundamentals.
  • Bookkeepers can create certain types of reports that accountants also have to produce.
  • Accounting professionals sometimes manage bookkeeping by using specific software programs.

What Are The Differences?

Accountants have a wider overview of your financial details. They can see your professional and personal finances. In contrast, a bookkeeper will be able to only see your financial records for professional purposes.

Today, bookkeepers are moving into advisory and business strategy capacities, while accountants are tackling the role of tax advice and guidance and financial planning.

Bookkeepers prepare taxes on sales and payroll. Accountants file professional and personal tax returns.

Bookkeepers can’t submit audits or attestations; however, accountants do. They are also able to give verified financial reports.

Control Your Financial Records Using Tax And Law Research Inc.

We can assist you with various financial areas to help keep your business operating smoothly. Our staff comprised of CPAs are available throughout the year, so you don’t have to check us up for just tax time or ask us to conduct regular reviews of the health of your business. We perform reviews and audits of payroll processes and various DCAA solutions for contractors and small-sized businesses operating in the construction, healthcare, government, IT, and healthcare sectors.

Tax and Law Research Inc. offers small-business owners and high-income individuals accounting and bookkeeping services. Call us today!

Leave a Comment

Your email address will not be published.