Bookkeeping VS Accounting
Bookkeeping and accounting are treated as identical jobs when viewed from a distant position. However, they are contrasting aspects of a business when stared closely. Both of them mingle in each other when you figure out their range of operations. For example, both of them deal in financial accounting and to some extent in the management accounting of the organization. Both of them play vital roles in the operations of an organization, yet they are distinct functions of the business. Bookkeeping is organizing the daily financial data, or more specifically the financial transactions of the organization. While on the other hand, accounting is the presentation of financial data to its stakeholders in an arrangement to make constructive decisions on its grounds. The following table will further illustrate the differences between them, courtesy of AD Bookkeeping.
|Output data prepared by bookkeeping cannot be based for decision making.||Accounting is a broad subject which behaves in using the financial data for the purpose to prepare a floor for the management to make critical decisions.|
|Bookkeeping is the process of managing the books of the company in a formulated way.||The purpose of accounting is to give a formation to financial data and present it to relevant authorities and stakeholders.|
|Despite the books of business are maintained and updated continuously in bookkeeping, precise financial statements are not part of bookkeeping.||Accounting is the preparation of a company’s financial statements in a pattern that can be presented to the general public and which are reliable.|
|Bookkeeping does not require any specific skills or qualifications.||Specialized skills with broad experience and professional qualifications are critical needs of accounting.|
|Bookkeeping does not prepare furnished reports or provide useful information to management.||Accounting is dealing with raw data and converting it into benign information and preparing management reports.|
Bookkeeping has gained its technological position in the online world which is becoming more than just maintaining the ledgers and reconciliations. We can also say that bookkeeping and accounting are merging under one roof. Many bookkeeping software has made it possible to extract many beneficial financial and management reports with a click. This means that either bookkeeping has intervention in the position of accounting, or accounting absorbed bookkeeping in it. However, the benefits of bookkeepers over accounting still exist that cannot be ignored. These are explained below
Benefits of hiring a bookkeeper over accountant:
Many small businesses do not desire a peculiar skilled accountant for their business. Bookkeepers can accomplish the objectives of these small businesses because simple financial and management reports along with simple financial statements can be prepared by bookkeepers.
It is hard to find a compatible and related accountant for your business to achieve your objectives. Some accountants may not have relevant experience in the same industry as your business. Bookkeeping is the identical same process of keeping financial data in books of business and does not need any exceptional skills. Bookkeepers are easily accessible by businesses locally or external bookkeeping service providers.
As accountants are qualified professionals of special skills, they are expensive to hire. Bookkeepers are the people that are not required to possess unique skills and are therefore cheaper to hire. You can find professional bookkeeping services from external providers at cheaper rates.