If you look up their job roles you’ll find it hard to distinguish the difference between bookkeeping and accounting. Both the profession’s core function is to manage finance.
Are bookkeeping and accounting the same?
No, they’re not the same, bookkeeping and accounting are two different poles. We have compiled a little information on this page to clear your thoughts which will let you know how despite differing from each other they still similar.
Bookkeeping is a managerial function that records financial transactions such as orders, refunds, sales, and transfers daily. While on the other hand, accounting is more analytical. It offers financial insights to company managers based on facts obtained from certain bookkeeping records. Since bookkeeping is the initial step in financial accounting, a bookkeeper’s and accountant’s duties at times overlap.
However, to clarify things for you, we have jotted down the functions of both accounting and bookkeeping:
Functions of Bookkeeping:
The following are the duties bookkeepers are assigned to perform:
- Maintaining a general leader is one of the most important aspects of bookkeeping. This document helps you keep track of all of your earnings and expenditures.
- Keep on updating the general ledger with credit and debit entries, also making sure that they are matched up.
- Keeping track of revenue growth as well as costs for rent, electricity, and office supplies.
- Keeping track of financial transfers
- Responsible for sales and purchase invoices management
- To keep subsidiaries and records in order and balanced.
- Processing payrolls
Keep in mind that the scale of the company and the number of transactions executed daily, weekly, and annually determine the efficiency of a bookkeeping procedure.
Functions of Accounting:
The following are the duties accountants are assigned to perform:
- Data verification and analysis
- Creating reports, conducting investigations, and writing financial reporting documents such as tax returns, income statements, and balance sheets.
- Providing data for projections, industry patterns, and growth prospects
- Assisting the company owner in comprehending the financial implications of his or her actions
- Making adjustments to the entries
- Accounting generates analyses that combine primary financial metrics. As a result, the company has a greater view of its performance and cash flow. Accounting transforms the material from the ledger into financial statements that show the company’s overall image and trajectory.
- Tax Planning
- Tax filing to HMRC
What is the difference between a Bookkeeper and an Accountant?
The ultimate goal of both professions is the same, they both aim to help you improve your financial situation. But the tasks that they perform are different.
Bookkeepers keep track of your accounts by tracking receipts, allowing you to see how much and from where the money is coming in. Also they take into consideration the amount that is going out of your company. At the point where the bookkeeper leaves the ground, the accountant continues the process. The financial records generated by the bookkeeper are then analysed by an accountant who provides useful market knowledge and financial guidance to the business owner.
Both professions necessitate basic know-how of accounting. Bookkeepers aren’t required to have any particular qualification, however, it is strongly advised. The level of certification required to become an Accountant is a whole other level. Bookkeepers lacking adequate qualifications cannot be recognised as Accountants, yet Accountants may be regarded as Bookkeepers.
Archimedia Accounts are a team of modern Bookkeepers in Nottingham, visit our main bookkeeping page for more information.