Is there a difference between bookkeeping and accounting? That’s a question that many people have, and for a very good reason. For the most part, people think that both of these jobs focus on managing finances; however, they are quite different from each other. Here, you have a list featuring some of the main differences between bookkeeping and accounting!                                    

 What is a bookkeeper?              

A bookkeeper records daily transactions and gathers financial information that’s necessary to run a business. Bookkeeping integrates a multitude of tasks, such as:        

· Handling payroll

· Managing historical accounts, ledgers, and subsidiaries

· Preparing financial statements

· Generating invoices

· Posting credits and debits

· Recording transactions.              

What’s important to keep in mind is that all companies need bookkeeping, regardless of their size. However, the bookkeeping complexity will vary based on the number of transactions, business size, and a variety of factors. But the bookkeeping process itself remains the same: you need to record all transactions, handle financial statements, generate invoices, and so on.                       

One thing to note about bookkeeping is that all the recorded transactions are the base of your accounting. In fact, what your accounting team does is they pull your financial data and analyze it. Clearly, accountants need bookkeeping in order to access all the data. That’s how it’s easier for the business to make adequate decisions. Without bookkeeping, there wouldn’t be any financial data, so it’s a pivotal part of your financial process.                                           

What is the role of an accountant?                              

Accountants will take financial data compiled by the bookkeeping team. Then, they help produce financial models. Unlike bookkeeping, which is mostly transactional, accounting is more subjective. The accountant performs tasks like:                                    

· Analyzing operational costs

· Helping business owners with financial decisions

· Complexing the tax returns

· Reviewing the financial statements

· Preparing adjusted entries                

Simply put, accounting focuses on the analysis of financial reports and narrowing down how you can make the right business decisions. Accounting is also making it easier for business owners to become more aware of cashflow, and how profitable the company truly it.                       

A lot of business owners will talk with the accounting team to create strategies like tax planning, financial forecasting, and so on. However, as you can see, bookkeeping is necessary for accountants, as that’s how they get to make the right decision based on accurate data.                                                 

Why does a company need a bookkeeper? What about an accountant?                           

Companies need bookkeepers, but they also need accountants, and each has their own role. Bookkeeping professionals help keep finances organized, and they offer straightforward, accurate data to the accounting team. Accountants, on the other hand, offer a complex analysis of your finances; they handle tax data and a variety of other information. They can also help with legal and compliance issues as well.                                  

Conclusion                                       

Any company needs great bookkeepers who focus on tracking all financial data while sending invoices and handling the day-to-day finances. However, they also need accountants who handle high-level finance tasks while also focusing on financial forecasting. Both bookkeepers and accountants are a vital part of any thriving business, and their importance shouldn’t be ignored!