What is the difference between accounting and bookkeeping?
Many people think that bookkeeping and accounting are the same thing, but bookkeeping is supplemental to accounting. Bookkeeping is the process of recording, classifying, tracking, and monitoring financial transactions; it is all about maintaining the daily business financial transactions, including purchasing, loans, mortgages, and any other activity that involves cash flow. A bookkeeper's goal is to record, summarize and arrange the daily financial transactions into a simple, easy-to-use format for the accountant.
An accountant’s job, on the other hand, involves analyzing, summarizing, reporting, reviewing, and interpreting not only the daily records but the company's overall financial information, including profit & loss statements, tax documents and managing the bookkeepers as well.
The materials used by the accounting staff comes from the data provided by the bookkeepers. In a typical business setting, accountants create the company’s bookkeeping system. This plan includes a schedule for day-to-day record keeping, filing and record turn-over. Anyone can be trained to be a bookkeeper, but only trained professionals can become accountants.
Companies composed of five or more partners, often make the mistake of entrusting the bookkeeping responsibilities to a “bookkeeping educated” partner, who in turn could easily fix the books, to his or her advantage. With a third party bookkeeper, business partners are more likely to have the proper records.
Why should a company outsource their bookkeeping and accounting?
Many businesses prefer outsourcing the bookkeeping in order to keep personnel focused on running and growing the business; outsourcing frees-up employees' time and resources to focus on business strategy, generating more sales and meeting company goals. Outsourcing is also an easy way for businesses to keep their financial information classified. Using well-trained experts to focus on your financials, also has the potential to reduce overall operating costs.
Quality Accounting Solutions has the ability to stream-line your bookkeeping and accounting processes. Let us focus on your business's books, so you can focus on your business. Contact us today to start saving time and money on bookkeeping, accounting or CFO services.