Accounting vs. Bookkeeping: What’s the difference?
Angelika Tirona
March 23, 2021
For every business big and small, accounting and bookkeeping play an integral part. Financial transactions and the management of which call for expertise, especially when an organization is expected to ensure transparency and fairness. Even in preventing fraud within and outside the organization, accounting and bookkeeping are still important factors.
Without proper accounting and bookkeeping, how is a business expected to stay on top of its gains and losses? Entrepreneurs know all too well the importance of hiring seasoned professionals for the job.
A bookkeeper and an accountant
The terms “bookkeeper” and “accountant” are often used interchangeably, but they refer to two different but equally important professions. Both hold heavy responsibilities for a business.
A bookkeeper’s task is to manage the daily financial transactions by recording the information in a database or ledger. Included in these transactions are sales, purchases, and expenses.
On the other hand, an accountant’s responsibility lies in analyzing the records created by a bookkeeper in order to generate reports, statements, and balance sheets. They’re also well equipped to provide insights that fuel business growth and planning.
Which of the two should you hire for your business?
It may seem like a business can survive with either one but having both an accountant and a bookkeeper is a must.
Hiring only a bookkeeper will give you access to important records, but with no one to interpret these for you nor handle reports and taxes. Hiring an accountant will give you the statements and strategy recommendations you need, but you’ll struggle to record your cashflow on a daily basis (and maintain its accuracy).
Accountants and bookkeepers work together to assist on an absolutely crucial aspect for every business: money matters.
If you’re a small business
It’s understandable to hesitate on hiring both an accountant and a bookkeeper if you’re a small to medium enterprise (SME), but it’s not impossible.
The key is to do your research and be patient in finding the right provider. Are they reliable? Do they have good feedback from previous clients? Do they have a history of managing potential risks and confidential data? These are some of the questions that you shouldn’t be afraid to ask your potential accountants and bookkeepers.
Working with a team of skilled professionals will indeed take a huge load off your shoulders. Although it may be quite pricey when you finally sign the contract, it will definitely still pay off in the long run.
Angelika Tirona is a Content Writer at Intelegencia. When she is not working, you can find her trying out new restaurants and dishes
Comment(s)
_BlogComment.Message