A Guide to Success for Your Business: Bookkeeping vs. Accounting
The key distinction between bookkeeper and accountant is that the bookkeeper is responsible for carrying out bookkeeping operations in the business where financial transactions are systematically registered, while accountants are responsible for accounting for the company’s previous financial transactions as well as reporting the company’s financial affairs.
Let’s learn about the differences between bookkeeping and accounting services before hiring one.
Role of the Bookkeeper
Bookkeepers enter the details into the accounts and keep the documents up to date. There is a transactional bookkeeping. It includes controlling all sales and expenditures, paying taxes, invoicing, payroll recording, etc.
Data entry and coding are the essences of bookkeeping, ensuring that the accounting system, spreadsheets, and files are loaded with the right records, coded to the correct accounts so that bills can be paid and reports can be drawn.
Since the bookkeepers are responsible for the initial data entry, they need to learn how to code each transaction.
Role of the Accountant
An accountant can do some of the same tasks as a bookkeeper, depending on the size of the firm. Nevertheless, accountants usually hold a four-year undergraduate degree and a greater level of education and expertise than bookkeepers.
Note, they are distinct from Certified Public Accountants (CPAs) because the additional preparation and assessment criteria required for that certification have not been achieved.
Usually, accountants monitor the bookkeeper and may charge, create general ledger entries, review payable transaction accounts, and reconcile payrolls. As far as the statistics and estimates are concerned, accountants are the front-line staff. They are in charge of maintaining the finances of the organization and ensuring full reconciliation. They aim to generate timetables for each account that endorse the final figures.
Division of Duties
To maintain confidence in the financial records, it’s necessary to have the division of duties.
The one liable for reconciling the bank statement can never be a bookkeeper who pays the expenses, nor should the person making the company’s transactions have the right to write off receivables or make bad debt entries.
An accountant generally has an accounting degree, by definition. An accountant may sometimes be someone who didn’t go to college but worked for several years under a CPA, studying the intricacies, ins, and outs of the profession.
A solid checks and balances accounting scheme look something like this:
- The bookkeeper makes the necessary entries.
- The accountant reconciles the bookkeeper’s job.
Remember that there is a distinction between a certified public accountant and an accountant (CPA). While all can file your tax returns, if you’re audited, a CPA is more educated about tax codes and can defend you to the IRS.
Some small business owners may opt to handle their accounts on their own. On the other hand, some may prefer to employ a specialist so that they may concentrate on aspects of the organization they are involved in.
You can look for “bookkeeping services in Australia”. Their business advisors recommend hook bookkeeping highly with the introduction of technology, multiple software is modified automatically to perform accounting functions. Accountants or Bookkeepers or Controllers need to be updated to the related technologies with the changing meaning and specifications of this profession.