what is the difference between accounting and bookkeeping

This can be especially valuable for businesses that may be subject to complex tax laws or regulations. A bookkeeper can also help you save time and money by organising your financial information and preparing it for your accountant. As both roles are essential for proper financial management, but serve different functions, we’ll look at when you might need to choose between one or the other. In this article, we’ll explain the key functions and differences between an accountant and a bookkeeper, how to decide if you need one for your small business and which one is best for your specific needs.

The reports and analysis you get from your accountant let you look at the patterns and trends that are emerging in your finances. Your accountant can help you to see which way things are heading and whether your business is growing or heading for a slump. It lets you see the long-range forecast and take high-level decisions to improve the health of your business. That kind of information can feed into all kinds of management decisions, from your future spending to sales targets.

When you need an accountant

However bookkeeping is how you record and categorise your financial transactions, whereas accounting is putting that financial data to use through analysis, strategy and planning. Also have a think about the qualifications and experience that they offer, along with the overall cost of their services. If you’re struggling with keeping up basic financial recording and often find it difficult to manage your invoices, payment cycles, or daily transactions, then it might be time to get a bookkeeper on board to help.

As a business owner, you need to make sure you have the right support around you. Accountants and bookkeepers are often top of the list when it comes to essential professional https://www.good-name.org/how-accounting-services-can-help-real-estate-companies-optimize-their-finances/ service providers. Although there is a lot of crossover between the work that an accountant or bookkeeper will do for you, there are some important differences too.

Bookkeeping and Accounting Courses:

In short, bookkeepers record transactions of your company, then accountants summarise, interpret and report them. We explain who needs both specialists and why a bookkeeper can’t substitute an accountant. We highly recommend Archimedia Accounts, retail accounting who have looked after our accounting for many years now. Great advice, always quickly responsive to an email or a phone call with regular face to face contact. Look no further if you need an accountancy firm with a professional, personal touch.