Accounting and bookkeeping are interrelated yet distinct business practices that are integral to any business’s financial health. The difference between accounting and bookkeeping can be a bit confusing. 

Accounting is the higher-level process of analyzing and summarizing financial data. That includes things like creating financial statements, preparing taxes, and creating budget forecasts. Bookkeeping, on the other hand, is the process of recording and categorizing financial transactions. It’s the day-to-day stuff, like recording sales and purchases, and tracking expenses.  

So, in short, both are important, but accounting is the bigger-picture stuff and bookkeeping is the day-to-day stuff. Does that make sense? 

Accounting and Bookkeeping 

Let’s get a little deeper with a look into the purpose of each along with the duties of a person involved in either.  

Purpose of Accounting 

1. To provide financial information to internal and external stakeholders. 

2. To ensure the accuracy and reliability of financial reports. 

3. To ensure compliance with applicable laws and regulations. 

4. To help managers make informed decisions regarding the company’s finances. 

Duties of an Accountant 

1. Prepare and maintain financial records, such as income statements and balance sheets. 

2. Analyze financial information and provide advice on how to improve the company’s finances. 

3. Monitor and report on financial activities. 

4. Develop and implement internal control systems. 

5. Prepare and file tax returns. 

6. Develop financial forecasts and budgets. 

7. Participate in audits and other financial reviews. 

8. Prepare financial reports for management and external stakeholders. 

Purpose of Bookkeeping 

1. To provide an accurate record of all financial transactions. 

2. To prepare periodic financial statements for review. 

3. To analyze and reconcile accounts. 

4. To provide information for tax preparation and audits. 

5. To maintain detailed records of receipts and payments. 

6. To ensure compliance with applicable laws and regulations. 

Duties of a Bookkeeper 

1. Record daily financial transactions in the general ledger. 

2. Reconcile bank statements. 

3. Prepare invoices and process payments. 

4. Track accounts receivable and accounts payable. 

5. Prepare and file sales tax returns. 

6. Prepare payroll records and payments. 

7. Analyze expenses and prepare financial reports. 

8. Maintain records of fixed assets. 

9. Assist with budgeting and forecasting. 

10. Assist with audit preparations. 

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Baffled by bookkeeping and accounting terms? Don’t worry! We’ve got you covered with our accounting and bookkeeping services. We break down the complex lingo of the industry, so you can understand the definition of any bookkeeping and accounting term quickly and easily. 

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Benefits Of Employing Bookkeepers and Accountants 

From managing day-to-day finances to filing taxes and staying up to date on the latest regulations, bookkeepers and accountants provide businesses with the professional support they need to make sound financial decisions. By hiring experienced and knowledgeable professionals, you can rest assured that your accounts are in good hands and that you’ll save money in the long run. Not only do bookkeepers and accountants help you to manage your finances, but they also provide invaluable insights into how to maximize profits and make the best use of resources. Whether you’re a small business or a large company, the many benefits of employing bookkeepers and accountants can help you to reach your financial goals.