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What is the Difference between Bookkeeping and Accounting

Online Legal India LogoBy Online Legal India Published On 14 Dec 2020 Updated On 14 Jan 2022 Category Accounting

People often get confused between bookkeeping and accounting. Bookkeepers and accountants share common goals, but they cater to different needs in a business operation. Bookkeeping is more transactional and regular, whereas accounting is a bit more insightful. 

Their purposes might be different but they perform one main duty. The duty is to ensure clear and smooth financial management for an organization. As per the recommendations of the CAs, all the operational entities should apply for bookkeeping to have hassle-free business functions.

Let’s go into the details.

Purpose of Bookkeeping

Bookkeeping is the process of keeping records of daily transactions in a business. With these reports, a ledger is prepared. In a ledger, all the sale and expense reports are kept.

Bookkeeper:

  • Records financial transactions
  • Reports debits and credits 
  • Generates invoices
  • Maintains general ledgers and daily accounts
  • Prepares payroll. 

                   

Purpose of Accounting

Accounting is a process that uses financial reports from a ledger to make financial models. With these models, the business owners can see if the company is incurring profit or loss.

Accountant:

  • Records expenses that have been missed by bookkeeping
  • Prepares financial statements of a company
  • Analyzes and examines the costs of operations
  • Files income tax returns
  • Assists the business owner in taking strategic business decisions

To ensure the long-term success of any business, Bookkeeping and Accounting play a key role. Some business owners manage their finances on their own, while others hire a professional so that they can focus on managing their business.

In this digital age, you can even hire an online accountant to do all the needful for you. In that case, you’re at the right place.

DIgital Accounting with Online Legal India™

Our proficient virtual accountants provide all-round accounting services to small businesses, CPA’s, CFO’s, non-profit organizations, entrepreneurs, and individuals across the world. Our dedicated online accountants are going to help you in staying above cash flow.

Besides financial guidance, our business experts and advocate panel is going to help you collaboratively in incorporating your business with Company Registration and GST Registration as well under one roof.

Find these helpful? Share with others to spread awareness regarding Bookkeeping and Accounting. 


                                                                      

 


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