Crocodiles and alligators. Tablets and pills. Bookkeeping and accounting.
Misconceptions are everywhere! And while we may laugh them off as childish ignorance, some misconceptions should not be dismissed.
For instance, the bookkeeping vs accounting misconception could affect someone’s career path or business operations.
But not to worry! Like most misconceptions, the bookkeeping vs accounting difference is quite simple once you know the details.
So, here are the key features of bookkeeping and accounting, and how to tell them apart.
Bookkeeping vs Accounting: Why the Confusion?
One of the biggest reasons for the accounting vs bookkeeping services misconception is usually caused by small businesses.
Often, due to the size of the business, an accountant may take on bookkeeping responsibilities. This is even more common since the dawn of bookkeeping software that can also handle some accounting tasks.
But on a larger scale, while these two jobs do work in tandem, they are very distinct roles. They both demand a certain level of dedication and, in the end, work to complement each other to the benefit of the company.
What Is a Bookkeeper?
A bookkeeper’s main role is to record the companies daily transactions. No money, coming in or out of the business, should escape the bookkeeper’s notice! These records need to be clear and easy to understand, as it will be the accountant’s job to review them.
Other tasks related to bookkeeping services may involve handling payroll, balancing accounts, invoicing and recording receipts, etc.
Nowadays, bookkeeping is relatively easy to learn. You could even start a bookkeeping business from home!
The major role of a bookkeeper is to gather and record what is needed to form the general ledger: the master document containing all of the companies fixed deposits credit and debits. This is then given to the account so that he or she can do their job. So, what is it?
What Is an Accountant?
An account’s main concern is the financial health of the company. Like a doctor, the accountant reviews and analyzes the records provided by the bookkeeper to see if there is anything to improve or be worried about.
Accountants also handle any tax-related tasks for the business. This is why they usually have a degree in accounting and/or finance to do their job well.
Based on the data received from the bookkeeper, the accountant will form a report for the business owner’s sake and then advise on how the company’s financial health can be improved in the future.
Accounting services have a range of functions that helps the business to know what direction it is going in. Anything that involves this level of involvement regarding finances usually falls on the accountant’s desk.
The Truth Will Set You Free
The bookkeeping vs accounting misconception is not one to be taken lightly. Although the confusion is understandable because they work so close together, as you can see, both careers require different paths.
Perhaps you are looking for a bookkeeper or an accountant for your company and this explanation has clarified your doubts. Perhaps you want to get into the finance sector and understanding the difference between the two has made your journey clearer.
Either way, we should never overlook these seemingly small misconceptions, as there is always something we can learn if we take the time to ask.
And we are here to help you on that pursuit! Keep browsing our website for more valuable articles like this one.