There is a difference between bookkeeping and accounting. Although both are used in business, but in a different way. In accounting, you keep track of every single financial transaction of a company. Bookkeeping on the other hand is the procedure of segregating and classifying financial transactions that have a direct effect on the financial statement of a company. Bookkeeping mainly consists of maintaining an accurate account of all the cash inflows or outflows of a company. Since bookkeeping has to do with the financial records of a company, it is called accounting.
Bookkeepers work much less than accountants. They are able to handle one financial transaction at a time, including buying or selling securities, receiving payments, and paying payrolls. Accountants, on the other hand, must deal with multiple financial transactions in one day. They are responsible for interpreting, evaluating, and preparing tax returns and statements. Accounting professionals play an important part in the development of internal control systems that allow for proper financial control.
The entry of values is also done by bookkeepers, while the entry of financial transactions is performed by accountants. A bookkeeper’s task is slightly difficult than that of an accountant as he has to enter the values manually and then compare them with the account recorded in the books.
Both terms are used in business and play an important part in making financial health a smooth one, it is only right that you know these if you are going to start your business.
Not only know but you should also understand how you can use them in your future business transaction. To ensure that you are using them correctly you can depend on business accounting software and some small bookkeeping app. To know more about the difference between accounting and bookkeeping continue reading this infographic by KIPPIN.