One of the biggest misunderstandings about accounting and bookkeeping is that they’re the same job. While the two professions work very closely together and, in many cases (like at Trillium), under the same logo, their jobs and responsibilities are quite different.
Even though there’s a lot that separates them, your accountants and bookkeepers have one common goal: they want your business to succeed!
The Major Differences Between Bookkeeping And Accounting
Accountants and bookkeepers both work with your money, but they do so in different capacities. In many ways, bookkeeping is more of an administrative job, whereas accounting is more subjective. Bookkeepers have to track and record financial matters and documents, and accountants use this information to give you insights into your business’ financial picture.
Put very simply, accounting consists of summarizing, analyzing, consulting and reporting of a company’s financial data. Your accountant assesses and interprets the financial data to reveal the bigger picture of the business. They must also:
- Be up to date on government tax regulations, ensuring the company follows the rules for their particular industry
- Prepare company financial statements
- Analyze the costs of operations and help you come up with the right financial strategy
- Complete tax returns
- To earn the accountant title, one must have a bachelor’s degree in accounting. They are also eligible for more professional certifications.
Bookkeeping, on the other hand, is the recording part of this process. Keeping a ledger to record and track the financial transactions of the business, like income, invoices, and expenses, is one of the most important tasks. A bookkeeper will also:
- Work with different financial programs
- Post debits and credits
- Produce invoices
- Do payroll services
- Bookkeepers aren’t required to have any formal education, though they can have some; they must also understand business and prioritize accuracy to succeed.
Bookkeepers and accountants both play important parts in helping businesses large and small find success. While they’re different roles, the two work closely together.
The Relationship Between Bookkeeping And Accounting
Bookkeepers and accountants have a very close working relationship. The bookkeeper helps the accountant in preparing financial statements, reporting to the accountant about how the information they gather and organize affects how an accountant interprets the financial information of the company.
Bookkeeping also involves entering the information into software that organizes them. Often, this software is recommended by the bookkeeper and approved for a double-entry system by the accountant. The accountant uses this information to give recommendations to the company about spending, tax issues or other financial concerns.
When accountants and bookkeepers can work more closely together, they can do a quicker, better job of tracking your finances and filing your taxes. The Trillium team of bookkeepers and accountants all work in harmony to paint the most accurate picture of your money – and help you come up with a financial strategy that works best for your business!