Definition:
• Accounting involves analyzing and interpreting financial data to provide a comprehensive view of a company’s financial health.
Responsibilities:
• Financial Analysis: Accountants rely on bookkeeping data but also look for larger trends and patterns.
• Strategic Decisions: They advise leadership on financial decisions, cost-saving measures, and profit generation.
• Tax Planning: Accountants handle tax compliance, planning, and optimization.
Specialization:
• Accountants are more specialized professionals.
Software or Professionals:
• Companies can work with accounting software or hire licensed accountants.
Collaboration:
• Bookkeepers and accountants often work side by side, complementing each other’s roles
Definition:
• Bookkeeping serves as a preliminary function by recording and organizing daily financial information.
Responsibilities:
• Transaction Tracking: Bookkeepers meticulously record all financial transactions, including sales, purchases, expenses, and payments.
• Data Entry: They maintain ledgers, journals, and other financial records.
• Reconciliation: Bookkeepers ensure that financial data aligns with bank statements and other sources.
• Financial Reports: They generate basic financial reports like income statements and balance sheets.
• A single point of contact at the client’s office communicates with the bookkeeping service provider.
• The client shares relevant financial information, invoices, and transaction details.
• The service provider’s bookkeeper records all financial transactions.
• They verify that entries are correctly posted in the appropriate ledgers. Regular reconciliation ensures consistency between records and external sources (e.g., bank statements).
• The one point of contact receives the completed bookkeeping tasks.
• The outcome includes organized financial records, accurate ledgers, and trial balance data.
• Many businesses use online bookkeeping software for efficient tracking. Easy access and work with the company online.
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