Know the Difference between Accounting and Bookkeeping Services

When people consider bookkeeping and accounting services, they often forget about the difference in both terms. Well, both these jobs are different, but they share common goals. Bookkeeping aims to be transactional and administrative and focuses on managing financial transactions. On the other hand, accounting gives your business insights depending on bookkeeping information. 

Both bookkeeping and accounting services deal with financial data, produce reports by using financial transactions, and need basic accounting knowledge. 

Both bookkeeping and accounting are important for businesses, but you need to understand the difference between both aspects. 

Bookkeeping Service Melbourne

A bookkeeper is responsible for accurately managing the financial data of a business. The main purpose of bookkeeping services is to ensure that every entry is accurate on a regular basis while keeping a record of all transactions in books. With this, a bookkeeper can store and calculate expenses and income, create sales invoices, make bank transactions, and raise purchase invoices. 

Bookkeepers also ensure that business accounts are balanced. They have the skills and knowledge to explain essential financial information to business owners and make these records make sense depending on this information. Bookkeeping for small businesses is essential to keep records of all financial transactions. These records include payroll, purchase, bill payments, and sales, etc. People who manage books need to have good math skills.

Generally, bookkeepers are not required to have high qualifications, but they should have enough knowledge regarding financial concepts. They need to be accurate in financial topics. The work of bookkeepers is overseen by an accountant, so bookkeepers can’t be referred to as an accountant.

Some responsibilities of a bookkeeper include:

1. Recording financial transactions

2. Generating invoices

3. Completing payroll

4. Posting credits and debits

5. Maintaining and balancing general ledgers and old accounts

6. Processing expense claims

Accounting Services for Small Businesses

On the other hand, accountants are responsible for managing accounts and generating financial statements and tax returns that follow laws. Accountants must have vast knowledge in financial laws and ethical problems, and they need to understand data and offer financial advice that can help a business. 

For accounting services or expert tax accountants, you can search for ‘tax accountant near me’ for best results. Accountants are professionals who will be responsible to perform several accounting functions, such as:

1. Adjusting entries or recording expenses

2. Preparation of financial statements

3. Analysing operation’s cost

4. Finishing income tax returns

5. Helping owner of the business in understanding the effect of financial decisions

6. Auditing

7. Financial prediction

8. Tax strategy and tax preparation

9. Analysing business performance

10. Financial management advice

11. Cash flow forecast

12. Organising budget

Accountants will be responsible to prepare and address different financial records. Their job is to ensure that those records are correct, address mistakes (if any), and assess the financial operations of the company to ensure that everything is running properly.

These professional accountants work in financial institutions, government agencies, retailers, nonprofit organisations, accounting firms, and more.  

An accountant manages entries made by the bookkeeper after each financial period. They do this by managing journal entries and generating documents like loss and profit and balance sheets reports. 

The accounting process includes financial statement preparation, such as cash flow statements, balance sheets, and retained earnings statements. It gives insight into the business. This is different from bookkeeping service Melbourne as bookkeeping maintains financial transaction records. 

Bookkeeping Vs. Accounting Services

Bookkeeping	Accounting
Bookkeeping is related to addressing, measuring, and storing financial transactions.	Accounting is related to summarising, translating, and communicating financial transactions that were listed in a ledger account.
Management would not be able to make any decisions based on data generated by a bookkeeper.	The management can make decisions, depending on the data provided by an accountant.
Preparation of financial statements is not part of this process.	During the accounting phase, financial statements are prepared.
The bookkeeping process doesn’t require any analysis.	During the accounting process, it makes use of bookkeeping information to analyse and interpret it and then generate reports.
Bookkeepers need to be correct in their work and should have knowledge regarding financial topics. Bookkeepers’ work is controlled by an accountant.	Accountants with high education and experience can get the title of Certified Public Accountant (CPA).

How are Accounting and Bookkeeping Services Beneficial for Your Business?

Bookkeeping and accounting both services are essential for any business, whether it is a small or large business. For the growth of your business, you need to hire a bookkeeper or an accountant for your business. It completely depends on your business requirements what you want, whether a bookkeeper or an accountant. If you don’t know the method of filing tax for your business, then you can hire a tax accountant Melbourne for your business. 

Well, if you want the best bookkeepers for your business, then you can reach Reliable Bookkeeping Services. We aim to keep all of your bookkeeping records updated.