People from non-commerce background often find it difficult to differentiate between accounting and bookkeeping professionals. There are several differences and similarities between their day to day tasks. Here are crucial points that highlight the similarities.
Bookkeepers create and maintain records for financial transactions conducted daily. Accountants are capable of performing the above tasks, and also play a consultative role by counseling administrators on various financial reports. Accountants are trained to classify, record, and track data like bookkeepers. Plus, they can also check the work for accuracy as a part of the accounting process. Both professionals are involved in recording and handling financial transactions, as well as creating various reports with advanced software.
Put simply; both services are crucial for the functioning of any business. Bookkeeping involves recording details of all the economic transactions. On the other hand, accounting involves summarizing, interpreting, analyzing, classifying, financial data. Bookkeeping does not include interpretation and data analysis, like accounting.
Both jobs need superb numerical and analytical skills as well as communication skills. Keeping attention on every number and minor details remain crucial.
Bookkeepers are responsible for creating a base for accounting work by keeping track of the company’s financial transactions daily in a selected chronology and method. It won’t be wrong to suggest that bookkeepers perform the first step of the accounting process by creating records for transactions.
These days, bookkeepers have upgraded their knowledge and skills as many of them were replaced by accounting software solutions that automatically perform data entry tasks. Thus, bookkeepers provide additional services like summarizing and classifying recorded data. Such professionals are referred to as service bookkeepers, but, not considered accountants. That’s because possessing knowledge about accounting and a college-level course certificate is not sufficient to turn a bookkeeper into an accountant.
Rapidly growing firms need the services of both professionals. The company’s financials can remain accurate, up to date, and monitored on time. Plus, taxes can be filed on time.
All accountants can be bookkeepers but not vice-versa
Accountants and bookkeeping executives need to be conversant when it comes to financial topics for ensuring their work remains accurate. But bookkeepers have support in the form of accountants who oversee their work.
When it comes to educational qualifications, bookkeepers usually hold a degree or diploma certificate completed after school/college education. Anyone with a certain level of experience and exposure to bookkeeping tasks can become a bookkeeper.
Accountants complete one or more certification courses after completing their Bachelor’s degree. They also complete articleship and other mandatory training courses before starting their practice. Individuals with accounting qualifications can work as Chartered Accountants, Company Secretaries, Cost Accountants, and Financial Analysts.
Keeping track of numbers
The most critical tasks performed by bookkeeping professionals are identifying financial transactions, preparing trial balance, a ledger account, recording business transactions. One of the significant functions of accountants is auditing these reports.
During the early days of a startup, entrepreneurs take care of bookkeeping themselves. Smaller startups that cannot afford a fulltime account often ask bookkeepers to manage data entry of transactions and handle accounting procedures with the help of software. Some startups prefer outsourcing both roles.
If you wish to outsource bookkeeping services in India, you should discuss your project with executives from FinAcc Global. Small and large firms can outsource the massive bookkeeping as well as accounting tasks so that they can spend their resources on primary responsibilities. Plus, firms can save their monthly expenditure on the accounts team as well. FinAcc Global takes care of accounting needs for several national and international firms. The firm has excellent data processing solutions and fool-proof data security systems in place.