The Difference Between Accounting And Bookkeeping
A lot of people are asking, is there any difference between bookkeeping and accounting? Let us start by discussing these two separately, so we can really understand each function.
What is the meaning of bookkeeping?
Bookkeeping is in charge in recording of the different basic accounting transactions like, recording receipts from clients, paying the suppliers, processing petty cash transactions, processing the payroll of employees, recording the invoices that are from the suppliers, Issuing invoice to clients and recording the changes in the inventory.
These transactions are processed by the bookkeeper. The bookkeeper follows certain procedures in order to perform bookkeeping transactions. These bookkeeping transactions are mostly used for the accounting needs of most businesses. The bookkeeper will collect and compile all of the financial statements from the different bookkeeping transactions. Know more about bookkeepers in http://dictionary.reference.com/browse/bookkeeper.
However, there could be errors with these financial statements if it is not processed by an accountant.
The accountant mostly handles transactions like accruing and deferring of the revenue and accruing and deferring expenses. Accountants deals with a wider field in accounting, such as accruals. Accounting deals with setting up the general ledger, designing all of the financial statements, creating charts for the financial accounts, Issuing customized management reports in order to address certain issues, creating budgets and comparing it to different actual results, compilation of the tax returns from financial information, making a set of controls that is in the financial system, changing the classification of transactions in order to meet the standards in accounting and designing record archiving, record keeping and a document destruction systems.
What to look for in a bookkeeper, there have one professional accountant that is in charge in all of the accounting transactions of the business. The accountant will set up the procedures then will also be done and followed by bookkeepers.
So the difference between bookkeeping and payroll tax accounting is that bookkeeping mostly focuses on businesses that has repetitive financial transactions and accounting is more focused on larger and more complex financial transactions.
There is actually a significant difference between the accountant and bookkeeper. The role of a bookkeeper is more based on one person that handles accounting transactions for smaller businesses. The bookkeeper is experienced but is not that knowledgeable with accounting training. If the bookkeeper has a lot of responsibilities, he or she can be considered as a very experienced bookkeeper. The accountant is more focused on a certain area.