What is the difference between bookkeeping and accounting?

 

Have you ever racked your brain wondering where accounting ends and bookkeeping begins? Well, you've come to the right place. In this blog, we'll walk you through the key differences between bookkeeping and accounting so you can feel confident investing in the right services for you and your business. Both bookkeeping and accounting are important pillars for the financial success of a business, but they perform two slightly different tasks:



Bookkeeping

Bookkeeping focuses on keeping an accurate track of a company's cash inflows and outflows. It's about the day-to-day flow of money and keeping finances on track.

In recent years, accounting software like our popular Xero has allowed business owners to reclaim the time they would have otherwise spent on bookkeeping. With the click of a few buttons on a smartphone, people can access and update their financial data from anywhere in the world. This is key to being able to focus on accounting, which is about the big picture.

Accounting

Basically, bookkeeping is the first part of the broader accounting process. The next steps of accounting are summarizing, analyzing, advising, and reporting on the records that are generated during the bookkeeping process.

Accounting is about using the data generated in the bookkeeping process and interpreting the results. It is about performing audits, preparing financial statements, and planning for business growth. Accounting is sometimes referred to as "the language of business" because it is such a fundamental part of a successful business.

Unlike bookkeeping, a good accountant needs specialized skills and experience to best interpret the data that comes from bookkeeping.

What's the difference?

Many moons ago, the line between accounting and bookkeeping was much clearer. Today, companies like ours focus on providing our clients with a well-rounded approach to business finances. This fully incorporates bookkeeping into our accounting process to provide a truly personalized service to all of our clients. Investing in your business finances will only help your business thrive.

 

 

 

 

Comments

  1. Ananya MishraOctober 15, 2021 at 10:23 AM

    When starting a business, everyone understands the significance of keeping correct books of accounts. Accounting is a type of information system that might be compared to a business language. The overall purpose of an Accounting Services system is to give information to a variety of clients. Small firms gain time and resources by using accounting services , which can help them increase output. Please contact us at +91 8929218091.

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