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Similarities & Differences between Accounting & Bookkeeping

by admin on April 7, 2015 Comments Off

All businesses require essential elements of accounting and bookkeeping. Financial records are being done through bookkeeping. Accounting is responsible for the summary of the entire financial report. It also provides analysis, interpretation, and classification related to the financial report. The things that differentiates bookkeeping and accounting is that accounting involves analysing and provides interpretation of financial data, while bookkeeping may be limited to recording of financial transaction.

Accounting process

Accounting services requires classifying, recording, interpreting, analysing, reporting, and summarizing financial records. Bookkeeping is the process recording the financial or any other business transactions. Gathering data and recording financial transactions is the first stage of accounting. Accounting process that involves the gathering and the recording part of the financial transactions are usually done by the bookkeepers. However, if you are the accountant, you can do all the accounting processes.

Bookkeeping

A bookkeeper does the recording of the financial transaction in a sequential manner. This process is normally done on a daily basis. Accounting software provides a great contribution to all of the accounting. It simplifies and automates many of the processes. Bookkeepers are entitled as the full-charge bookkeepers. It means that full-charge bookkeepers are solely responsible for the accounting. They can also do a direct report to higher personnel like a senior manager, board of directors, and auditors.

Accounting

An excellent accountant follows the standards, principles, and basic requirements in accounting. Accountant does the analysis of every business transaction, interprets the results, and provides the financial report. Accountants are able to determine the condition and performance of one business, which helps business owners or company leaders make their decisions.

Similarities

Bookkeeping and accounting are both used in many forms of business or financial data. Untrained eye may consider these two as the same profession. Bookkeepers in smaller accounting services Singapore firm usually do more of the accounting than by simply gathering financial data and transactions. To have this as a profession, one must simply have a basic knowledge about accounting before working in an accounting firm. Through financial transactions, bookkeepers are able to classify and do the report too. Some of them may not have the proper education to handle these tasks, but because of the accounting software readily available, it made the transaction easier. Sometimes, the account may also do the recording of the financial transactions, and does some parts of the bookkeeping associated with the process of accounting.

Differences

If you study or take few courses related to accounting, it may qualify you for a job related to bookkeeping. Legitimate accounting services in Singapore usually require an accountant who finished a bachelor’s degree in accountancy or even higher. If you’re a certified public accountant, you can do to all the stages of the accounting process, while bookkeepers are only subjected to do the recording of financial transactions. To ensure the quality of the accounting, accountants usually provide advices to bookkeepers and their output are reviewed as well. Bookkeepers also lay the groundwork accounts so that financial data can easily be analyse.

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