BOOKKEEPING VS. ACCOUNTING: Know the Difference

When it comes to paperwork and numbers, most business owners would rather fill a filing cabinet and focus on other tasks at hand. We all know it can’t be that way because a balanced budget and thorough records are keys to success in business. All large companies have sophisticated accounting and bookkeeping procedures in place; they know just how important financial efficiency is to their bottom line.

If you own or manage a growing business, you need to familiarize yourself with the financial side of things. Read on for a brief rundown on the differences between bookkeeping and accounting.

BOOKKEEPING DEFINED

Bookkeeping is a business’ collection, organization, storage and access of its financial records. This process smoothes daily operations and ensures detailed records are kept. An efficient bookkeeping system should be able to produce accurate and timely financial statements, tax information and internal assessments on demand.

ACCOUNTING DEFINED

Accounting is a more general term than bookkeeping, but it also carries more weight. Where a bookkeeper is tasked with maintaining financial records day-to-day, an accountant’s responsibilities can include the following:

  • Planning and detailing bookkeeping processes,
  • Creating checks and balances (controls) within the bookkeeping process,
  • Proofing collected financial records for efficiency,
  • Analyzing and predicting financial trends based on individual results,
  • Working with bookkeepers to ensure the process meets all needs,
    – Understanding the economic market and much more.

RUN LIKE A WELL-OILED MACHINE

Businesses are made up of a variety of interconnected, moving parts– like a machine. If you build a machine, you want all of the parts working in unison. Imagine a bookkeeper as the essential components of your machine, the ones that keep it running every day. Bookkeepers must be as accurate as they are diligent in accomplishing their tasks, regardless of repetition or an increased workload. This work is demanding, so it is sensible to bring in an accountant– in this scenario: the oil for your machine. Accountants work with your bookkeepers to smooth out all of the hiccups and snags that can happen when you own a business.

Ensure your machine is running smoothly: contact Liu & Associates today for your accounting needs. Our accounting experts can ensure all of your business’ needs are met by working directly with you and your bookkeeping staff. Whether building a system from the ground up or overhauling existing processes, Liu & Associates can provide unparalleled financial guidance and support. Contact us today for a comprehensive consultation with our highly trained professionals.