When most people talk about bookkeeping and accounting, they might think that both are same for functionality in word of business. Most the time, business owner will put in mind both process are same in term to complete a financial report. Hence, they would be hardly to figure out what is the different between these two processes. While both bookkeeping and accounting are interchangeably, they only works in different stage of finance cycle.
Bookkeeping is part of accounting, which is a fundamental process for an account. Bookkeepers are mainly on recording financial transactions. While accountant works on analyse and insight for financial transactions. From this point of view we can find out bookkeepers is more administrative, accounting is more subjective to be analytical.
The role of bookkeepers
Bookkeeping. Yes, “these” are the only function for bookkeepers. However bookkeeping is process to record all the daily/monthly transactions and all the financial activities in a consistent way. Every single financial transaction of the entity have to be register into the records. Some of the sales and purchases need to be recorded in the ledger and some of it need to be attached with the supporting document. All of these record are involve of few key components which is:
- Recording financial activities
- Generate invoices
- Posting debits and credits
- Maintaining general ledgers, past-record accounts and subsidiaries.
- Complete and checking payroll
Complexity for a bookkeeping process are varies depends on the size of business and number of transactions. Varies of type of business will always require different form of the bookkeeping whether have be record in hardcopy or software. However, hardcopy bookkeeping will slowly diminish when all the task can be handled by bookkeeping software.
The role of accountants
Accounting is a further process that uses information that compiled by a bookkeeper or the records, and produce financial models based on the acquired financial record. Therefore, accounting become more subjective than bookkeeping; which is:
- Preparing financial statements
- Analyse costs of operations
- Revenue analysis
- Handling income tax returns
- Interpret the financial report to business owner and help to understand the impact for decision making
The service provide by accounting not only just a financial report, but also the result is a better understanding for the business owner to know the actual probability and cash flow in the business. Therefor business owner will often look to accountants for help with tax planning and financial.
In conclusion, do you need both services? The answers is yes. Bookkeeping is to disclose the correct picture of income and expenditure at the end of the accounting period. Meanwhile, accounting turns the information from records into statement to reveal big picture of the financial situation in a business.
Your accounting is valid only if the bookkeeping records are accurate. AG Singapore provide professional bookkeeping and accounting service for your business. AG Singapore are among the well-respected in this industrial. Give us a call today, and let’s start a conversation. Or click the link below for more information https://ag-singapore.com/. Subscribes our newsletter and gain more exciting information.
