There are many similarities between accounting and bookkeeping, but the two couldn't be any different. There are a lot of differences between the two. If you want to learn about the differences, then continue to read on.
Bookkeeping involves keeping financial records/affairs that are related to a business. Bookkeeping can either be done via the business owner or a professional, who is known as a bookkeeper. There is software that people can use for bookkeeping purposes, but a professional bookkeeper will have received training, which means they may be better equipped at handling bookkeeping tasks than a business owner or someone who doesn't have bookkeeping experience.
What Is Bookkeeping Comprised Of
It is comprised of many things, such as a bookkeeper can record financial transactions
. They can record things such as credits and debits, as well as post them. If a business needs to produce invoices, then they can ask their bookkeeper to do so.
Another thing a bookkeeper can do is maintain general ledgers and balance them. Bookkeepers can maintain historical accounts too, and they can complete payroll. It doesn't matter if you have a couple of employees or a few hundred employees, a bookkeeper can complete payroll to ensure everyone receives their payments. Accounting
Accounting refers to the process of recording financial transactions, either for a business or an individual. Also, accounting involves summarizing the financial and business transactions. Accounting is done by professionals who can analyze transactions, as well as verify them and they can report the results from their analysis. As you can see, in this sense accounting and bookkeeping are quite similar, but accountants and bookkeepers often do completely different things for a business or an individual. What Is Account Comprised Of
Accounting is a bit more complicated than bookkeeping, as it involves an accountant that looks at the financial information that has been put together by the business owner or a bookkeeper. They then use the information to produce a financial model for their client. Generally speaking, bookkeeping is mainly transactional, where accounting is subjective.
With that said, an accountant can complete tax returns for their clients, both businesses and non-business entities. They can prepare and produce financial statements as well as explain the potential impact of certain financial decisions that a business owner is considering. Besides that, they can analyze the cost of a business's operation and recommend what a business can do to save money or improve its operation. Accountant vs. Bookkeeper: The Role
- Generally speaking, bookkeepers undertake specific studies, and they have an associate's degree or they have 2-4 years of working experience. Bookkeepers generally aren't required to have a degree as long as they have plenty of experience. However, bookkeepers do need to have the utmost accuracy in their work if they want to be successful.
Although they are not accountants, bookkeepers should be knowledgeable about various financial topics. In many cases, an accountant oversees the work being done by a bookkeeper. Alternatively, the business owner they are doing work for might oversee the bookkeeper's work.
2. An Accountant
- For a person to work as an accountant, they will usually need to have a degree in accounting, preferably a bachelor's degree. If a person doesn't have an accounting degree, then they should have some other type of financial degree. Most accountants will have a bachelor's degree related to the financial industry.
One of the key differences between an accountant and a bookkeeper is that an accountant can continue their education if they want to earn other professional certifications. For example, they can go on to become a CPA, short for Certified Public Accountant
. If they wish to become a CPA, they have to take an exam and have done work as an accountant.
Accountants and bookkeepers both can work for businesses. Accountants can even go on to run their businesses and so can bookkeepers. As for which one costs more, this depends on many factors.
If you run a business or plan on starting a company, then you'll want to consider using a bookkeeper and an accountant. The choice is up to you, but you should always take the time to research accountant and bookkeepers before deciding which one to hire. Good luck if you decide to search for a bookkeeper or an accountant