Difference Between Accounting And Bookkeeping | WBS Business Solution
Accounting and Bookkeeping.
When people consider the differences between accounting and bookkeeping they’re unable to distinguish between the two processes. Bookkeeping and Accounting have the same objectives, both can help your business in various stages within the process of finance. What is bookkeeping? Bookkeeping definition is that it is more of a transactional and administrative and focuses on the recording of financial transactions. What is accounting? The accounting process is more psychological, offering insight into your company’s financial health and financial health using the bookkeeping data. In this article we’ll go over the main distinctions between bookkeeping and accounting and also the different roles of accountants and bookkeepers.
KEY TAKEAWAYS Of Accounting and Bookkeeping.
- Book keeping is the process to record all the financial transactions.
- Bookkeeping is the part of accounting.
- In accounting , financial transactions are analyzed by accountants.
- The objective of accounting is to set the business forecast.
- Accounting will help the businessman to make better decisions for the future.
- While bank reconciliations are under bookkeeping.
Difference between acoounting and bookkeeping
|Bookkeeping is part of the accounting system.||Where bookkeeping ends, accounting starts from there. Bookkeeping is the start of accounting.|
|The outcome of the bookkeeping is key for accounting.||While accounting helps the firms to take decisions about business.|
|The record of financial activities is saved in bookkeeping.||To check the financial strength and the outcome of the current business activities.|
|All the matters of bookkeeping are managed by a bookkeeper.||All the matters of accounting are managed by an accountant.|
|Bookkeeping is done by less qualified persons||While accounting needs an expert person.|
|Financial transactions are not a part of Bookkeeping.||All financial transactions are analyzed in accounting.|
First thing to consider is that the tasks of a bookkeeper and an accountant overlap since bookkeeping is an aspect of accounting. Bookkeeping, as the name suggests, is about keeping books and is the primary stage in the process of accounting. The bookkeeper is accountable to keep an accurate and full record of financial transactions of a business. It is, in general, an automated process that doesn’t require an analysis or investigation of financial transactions; rather, it is a simple recording of the transactions. Bookkeepers, however, are essential to the effective running of a company by, for instance, keeping track of the payment and receipts of the company and ensuring that the right amount is paid and received (and at the correct date and time). The bookkeeper must follow the prescribed procedures that are repeated on a regular basis to document each transaction that takes place every day. The transactions are then counted at the close of the day and also at the closing of each month. The most common bookkeeping tasks like sending invoices to customers, collecting cash receipts from the customers and recording invoices from suppliers also recording inventory processing payroll, and petty cash transactions are sufficient for the accounting requirements of businesses that are small in size.
A financial accountant, on the other hand, would concentrate on the overall financial picture and carry out tasks that impact the entire accounting process. They build on the data given by the bookkeeper and then categorize, analyse the data, summarize, interpret and then report on the financial information. The books have to be kept up-to-date by the bookkeeper, however the books are then passed to an accountant who will carry out further analysis that adds some significance. The accountant analyzes and interprets financial data for the company to predict the financial statements as well as evaluate the efficiency of the company. In addition, the accountant may choose to work in a variety of areas, including managerial accounting, financial Accounting, Tax accounting auditing, or financial services. Due to the similarities in the jobs of bookkeepers and accountants typically, the two terms are employed in conjunction. But, they are two distinct careers or professions and it takes students longer to become a certified accountant due to the difficulty as well as the nature of work.
Bookkeeper Vs Accountant.
Typically Bookkeeper and accountant have different credentials.
Bookkeepers generally don’t need to pursue any formal training. To succeed in their job bookkeepers must be meticulous and be knowledgeable about important financial issues. The bookkeeper’s job is overseen by an accountant or small-business owner whose books they’re working on. Thus, a bookkeeper isn’t able to be referred to as”an accountant.
To be eligible for the title of accountant, a person must have a bachelor’s level in accounting. If you don’t have an accounting degree the finance degree is often considered to be an acceptable alternative.
Contrary to bookkeepers, accountants can also obtain additional professional certificates. For instance, accountants who have adequate experience and knowledge can be awarded the designation as a CPA, or Certified Public Accountant (CPA), one of the most popular kinds of accounting designations. To be CPA, an accountant must be able to pass the Uniform Certified Public Accountant test and have experience as an accountant professional.
Either it should be bookkeeping or accounting. WBS is always with you people. Accounting and bookkeeping are different things but the objective is the same. Both segments are ready to support the businessman for growth and achievement. WBS always loves to serve you. We are very passionate and hard workers. Success is our key objective , So let’s come with us to celebrate the victory.