What is The Difference Between Bookkeeping and Accounting? - PowerPoint PPT Presentation

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What is The Difference Between Bookkeeping and Accounting?

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Although your business may have both a bookkeeper and an accountant on staff, their job duties are quite different. – PowerPoint PPT presentation

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Title: What is The Difference Between Bookkeeping and Accounting?


1
What is The Difference Between Bookkeeping and
Accounting?
2
  • Bookkeeping involves recording each transaction
    for a business while accounting is more about
    looking at all those transactions to find trends
    that can be used to help a company. More
    specifically, bookkeeping is done with paper
    records, while accounting requires software
    programs.

3
  • Bookkeepers record each transaction in a
    companys financial. Accounting is more
    subjective, giving you insights into your
    businesss financial health based on bookkeeping
    information.

4
  • Accounting and bookkeeping are two related fields
    with some differences in functionalities.
    Understanding these differences is important
    because the roles of accountants and bookkeepers
    differ based on their respective skill sets,
    expertise, knowledge base or background
    experiences (e.g., accounting vs finance). In
    this guide, we will explain the functional
    differences between accounting and bookkeeping.
    We will also discuss the distinct roles of a
    bookkeeper versus an accountant.

5
  • The function of bookkeeping 
  • The role of a bookkeeper is to record and detail
    the business transactions that affect any aspect
    of your business (e.g., revenue, expenses,
    payroll, inventory). You can think of a
    bookkeeper as someone who records the basic
    transactions happening in a business not much
    beyond recording them.

6
  • Bookkeepers typically handle routine day-to-day
    ledger maintenance. The general ledger is a basic
    document where a bookkeeper records the amounts
    from sale and expense receipts. This is referred
    to as posting. The general ledger is a
    summarised list of all amounts.

7
  • The function of accounting 
  • Accounting is a high-level process that uses
    financial data compiled by a bookkeeper or
    business owner to produce financial models,
    reports, and analyses. The main goal of
    accounting is to provide useful information to
    managers, investors, tax authorities, customers,
    suppliers, employees etc.

8
  • Accountants can also offer advice on business
    decisions based on analyses derived from
    financial data in addition to providing
    regulatory compliance for businesses (e.g.,
    accounts are retained for a certain number of
    years). A financial statement serves as the basis
    for making business decisions and helps monitor
    performance.

9
  • Accountants gather, organise, and summarise
    transactions, then draw conclusions based on that
    information. Accountants analyse past
    performances to make better business decisions in
    the future. They compare their findings with past
    performance and Analysing costs of operations and
    Completing income tax returns.

10
  • The roles bookkeeper vs accountant 
  • Bookkeepers record the amounts from sales and
    expense receipts. They keep track of financial
    transactions in journals, ledgers, and computer
    programs. Accountants combine information from
    several sources to draw conclusions about a
    company's performance.

11
  • They collect relevant data that is then analysed
    before drawing conclusions or giving advice.
    Typically, bookkeepers are not required to have
    any formal education. To be successful in their
    work, bookkeepers need to be sticklers for
    accuracy, and knowledgeable about key financial
    topics. Accountants, on the other hand, need a
    bachelors degree in accounting or finance from
    an accredited university. Additionally, they must
    get a professional license from their state to
    operate as accountants.

12
  • Although your business may have both a bookkeeper
    and an accountant on staff, their job duties are
    quite different.
  • Here are the major pointers.

13
  • Bookkeeper
  • Recording and categorizing financial transactions
  • Posting debits and credits
  • Producing and sending invoices
  • Maintaining and balancing subsidiaries, general
    ledgers, and historical accounts
  • Completing payroll
  • Record keeping

14
  • Accountant
  • Preparing adjusting entries
  • Preparing financial statements
  • Completing income tax returns
  • Financial analysis and strategy
  • Tax strategy and tax planning
  • Financial forecasting

15
  • iKeep Bookkeeping Hall Chadwick
  • Organised financial records and perfectly
    balanced finances produced by the bookkeeper,
    coupled with smart financial strategy and
    accurate tax filing by the accountant, contribute
    directly to the long-term success of every
    business. iKeep bookkeeping with its partner firm
    Hall Chadwick, offers services ranging from
    bookkeeping, accounting, compliance solutions, to
    financial planning and strategy. Find out more at
    www.iKeep.com.au
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