Comparison of accounting and bookkeeping job
The bookkeeping job is the first part of the situation; therefore, a bookkeeper and an accountant overlap. Bookkeeping involves recording and organizing financial data; an accountant will understand them to produce financial statements.
A bookkeeper will record the daily, monthly, and annual transactions by posting debits and credits. Also responsible for issuing invoices and completing the monthly payroll. Further responsibility is maintaining ledgers, like sales and purchase catalogs, besides reconciling all the accounts and bank reconciliation.
Whereas an accountant checks and produces all the financial statements, maintain cash flow and budgets, then consistently checks the budget and cash flows and examines the variances. Analyze the reasons for the variations, then make the necessary adjustments not to create any cash flow problems or affect the business’s profit.
An accountant has to attend the financial meeting with the directors and produce the financial report already done to help the management make the strategic decisions to grow the business or leave the company.
Comparison of accounting and bookkeeping job
Bookkeeping & Accounting
Description
Bookkeeping is mainly related to recognizing, calculating, and recording financial transactions that end up in the production of trial balance.
Accounting is the process of summarizing, understanding, and collaborating financial transactions, which are already categorized in the ledger accounts, using the trial balance to produce financial statements.
Strategic decisions
The information provided by the bookkeepers will not help the management to make any useful decisions.
The management can make critical business decisions depending on the data provided by the accountants.
Independent
Bookkeeping aims to keep records of all financial transactions properly and systematically.
Accounting aims to measure the economic situation and further communicate the information to the relevant authorities.
Preparation of Financial Statements
Financial statements not prepared as a part of this process
Financial statements prepared during the accounting process
Skills Required
Bookkeeping does not require unique skill sets; you can be a bookkeeper with some training.
Most people who study and practice accounting with accounting companies can be an accountant for any company.
Analysis
Bookkeeping is easy to do if you are good with numbers, as it does not involve complicated functions.
Accounting uses the work produced by the bookkeeper to investigate, check, and prepare financial reports.
Methods to use in recording
Small businesses use single-entry bookkeeping, and other companies use a double-entry system.
The accounting department makes preparations for a company’s budgets and plans for loan proposals.
Bookkeepers and Accountants
If the bookkeepers ignore accuracy and understanding, the categorization will create problems in the company accounts.
Bookkeeping slowly becomes outdated.
An accountant usually oversees bookkeepers’ work. An accountant is responsible for the computation of the tax liability for the business.
While most businesses will still need a bookkeeper to keep the books, the accounting will become more than just data entry, balancing bank ledgers, and reconciling bank statements. Some small business owners may be unable to use the accounting software apart from them. Most businesses use accounting software to perform all the functions mentioned here. Therefore, the company may manage their bookkeeping work by one or a part-time bookkeeper. Due to the advancement of technology, anyone can do bookkeeping; only they have to learn to use a particular accounting package. It could quickly do with a short training period.