Last Updated by Richbrite on October 9th, 2021 at 09:58 pm
Accounting and bookkeeping are two parts of any critical phase of the business. Both services help business owners and CEOs keep the pathway of their expenditures.
And make knowledgeable business decisions, or possibly avoid serious problems such as fraud and other issues about these services. On the other hand, these services are very similar in their purposes.
There is a big difference between these two parts. These two functions are extremely essential for every type of business. Bookkeeping and accounting need to have expert and knowledgeable persons who better know financial laws and ethical issues.
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If you know about the Difference between Bookkeeping and accounting, each position plays a vital part in business growth and strategy.
1. Definitions: Bookkeeping and accounting
Bookkeeping is recording your all data, organizing, storing, and accessing the financial information base. It is important for your daily business operations and is the foundation for making statements, tax returns, and other important reports.
In a word, bookkeeping is the process of recording financial truncations. Bookkeepers “near me” in Plano trained and know very well about financial data means to key stakeholders within the company.
Accounting, in the other words, not only recording the financial information but also summarizing it in a useful way. If you hire an accountant, you should be able to tell you how much profit and or loss you are making, they also know the current value of your company’s assets and responsibilities and the positions of the cash flow.
The accountants will take all data produced by the bookkeeper which is most conditions will be through your accounting software. The data need to adjust to reflect the true situations.
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Bookkeeping and accounting are categorized as two different processes, it only makes sense that they differ in their ultimate purposes as well. The main purpose of the bookkeeper is to record all financial transactions accurately, logically, and systematically.
Usually, bookkeepers record such financial activity Chronologically. On the other hand, the goal of an accountant is to determine the financial status or well-being of the company and pass this data on to the key investors.
Though, accountants are not concerned with daily tasks of bookkeeping although these are compulsory but are instead attentive to all the financial data that has been compiled.
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3. Scope of Work
Bookkeeping and accounting though both are different but they have different scopes.
Bookkeeping responsibilities including the following tasks: They must pay debts as they come due. Issue customer invoices. They also collect sales taxes and onward them to the government. Record all cash takes.
Maintain the cash fund, oversee an orderly accounting filing system and also maintain the annual budget. Bookkeeping regularly processes payroll on time. They will provide clerical and organizational support as well.
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There is a wider variety of important tasks with accountant duties. These could include the following actions. Reading correctly and understanding financial records. Make sure that the company is in total compliance with all state and federal regulations.
Preparing your tax return, or analyzing minimize ways to tax burden. Preparing financial statements, offering reports to key stakeholders.
While there is a considerable overlay between bookkeeping and accounting duties, for the maximum quantity, bookkeepers are concerned with daily maintenance of financial data, on the other, accountants are focused on leveraging the company’s financial data to make wise business decisions.
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4. Skills Required for Bookkeepers Vs Accountants
Bookkeeping jobs normally, do not need a special skill or an advanced degree. However, bookkeepers should be experts in math and arithmetic and highly organized.
They also should work be careful and avoid mistakes. In accounting generally require a bachelor’s degree in accounting or related things. In the other scenario, some accounting positions need a master’s degree. CPA in Dallas provides well-known bookkeepers and accountants.
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5. Types of Bookkeeping and Accounting
Two basic types of bookkeeping processes:
- Double Entry: Double-entry systems related two records for each transaction. One record of accounting being credited or one of the other debited.
- Single Entry: Normally, the single-entry method involves only one record for each transaction. They are fully focused on transactions related to cash respites or disbursements.
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