Bookkeeping and accounting services can both be handled by accountants. However, there are many differences between accounting and bookkeeping. While these may sound quite similar, there are actually several key differences that make accounting slightly different from bookkeeping.
Accounting refers to the process of recording financial transactions and reports. Bookkeeping is the process of maintaining accurate financial documents. In accounting, an accountant records the day-to-day activities of the business such as sales, purchases, cash flows, loans, and payroll. An accountant is also responsible for providing financial guidance to the business as well as knowing the business’ financial situation.
The primary purpose of accounting services is to provide an understanding of a company’s expenses and incomes. They also provide statements to the financial reporting firm to provide a comprehensive overview of the business’s business condition. Accountants create financial statements from the recorded transactions and report them to the accountant general.
A company should have a system in place for reconciliation between its financial statements and its accounts. This is called reconciliation. A reconciliation process reconciles the differences between the recorded financial statements and the actual transactions recorded in the accounting system. These transactions could be in the form of purchases or sales, purchases and sales times, inventory balances, or gross receipts.
Bookkeeping provides information about the financial information of a business. It involves the collection, storage, and retrieval of information related to transactions in a daily basis. A bookkeeper will record, maintain, secure, and report all transactions occurring in the business. It includes the recording of financial transactions, the maintenance of accounting records, and the preparation of financial statements.
Accounting provides reports and financial data to owners, managers, investors, tax authorities, regulatory bodies, and other professionals. All these involved parties rely on accounting reports and financial data to make informed decisions. It helps them make better management decisions and achieve financial objectives. It therefore is a prerequisite for businesses of any size. All business entities require accountants to manage their financial position on a daily basis.
Bookkeeping services include the entry of daily transactions in ledgers. These are ledgers that contain transaction information such as sales transactions, purchases, income transactions, and the payment transactions of customers. The information thus entered in the ledgers are interrelated in nature. A complete accounting system would be a highly complex interlinkage of these various transactions. In case of any missing link, the entire system breaks down.
You need an accountant or bookkeeper to take care of your accounting and bookkeeping. There are many firms providing accounting services. You should therefore do some research before you hire any particular firm for your business. Get online and compare the rates of several accounting firms before you select one to service your business.
You will save money and time if you outsource your accounting and bookkeeping. You do not have to worry about entering the figures manually into the computer. The professional accounting service providers will take care of all the accounting related works including paying the payroll, filing tax reports, and handling other finance issues. They also handle the implementation of your business’s cost control policies.
The accounting and tax preparation company prepares the necessary accounting records on your behalf after receiving the necessary authorization from you. The company will prepare your income statement, balance sheet, statement of cash flows, profit and loss statement and national sales and distribution accounts. Professional bookkeepers usually prepare your individual income statement, your statement of cash flows, balance sheet, profit and loss statement and national sales and distribution accounts. The accounting and tax preparation company will also handle the preparation of your tax returns.
It is recommended to hire a qualified bookkeeper or accountant to handle the accounting and bookkeeping tasks. A qualified accountant or bookkeeper will be familiar with standard procedures related to the preparation of tax returns, bookkeeping, and financial statements. The accountant or bookkeeper will help you maintain proper records and follow procedures laid down by the Internal Revenue Service. The accountant or bookkeeper will ensure that all the paper work submitted by you is properly entered in the books and accounting and bookkeeping services.
Quickbooks is a great tool for managing the bookkeeping and accounts. The software helps you track your daily transactions through the click of a mouse. You can import transactions from your bank and credit card accounts through Quickbooks. You can create custom reports from the reports that are imported through Quickbooks. The accounting and bookkeeping services provided by professional bookkeepers and accountants will enable your small business to maximize its profit potential and reduce the risks of financial loss.