All business requires a bookkeeping and accounting process to adjust the financial records at the end of a year. In addition, it helps the business assess its worth and build future decisions.
This we use interchangeably. Though bookkeeping and accounting are integrated, there is a thin line to distinguish between them. Bookkeeping is part of accounting, bookkeeping services in USA you dedicate, accounting has a broader scope than bookkeeping.
Bookkeeping
It is the method of affirming and recording all economic transactions in the original books of the approach of a business. The bookkeeping process entails compiling and organizing all the company’s financial activities and deals chronologically in a well-organized, systematic manner.
The bookkeepers manage and record the books of accounts. All the financial matters such as taxes, selling revenue, loans, share income, payroll, operational costs, investments, etc., are registered in the original books of accounts. The efficiency of bookkeeping limits the precision of the accounting process followed by a company or business.
Accounting
It is the method of evaluating, examining, paraphrasing, and reporting the financial transactions of a business. The financial statements prepared in accounting are a specific summary of financial transactions over an accounting term. These reports summarise a company’s financial position, operations, and cash flows to get QuickBooks online.
The main difference between bookkeeping and accounting is as follows;
Bookkeeping
- It is a single part of the whole accounting system.
- The outcome of the bookkeeping process is providing data for accounting.
- Intends to maintain a systematic record of financial activities and transactions chronologically.
- It aims to compile the effect of all business financial transactions for a given period.
- The person accountable for bookkeeping is a bookkeeper.
Accounting
- It begins where the bookkeeping stops and has a wider scope than bookkeeping.
- Accounting outcome is planning financial statements for making informed choices and decisions.
- Its objective is to describe the financial strength and get the results of the functional exercise of a business.
- The purpose of accounting is to interpret and analyze business information for informed judgments and decisions.
- The person answerable for accounting is an accountant.