Is it justified to say that an accountant and a bookkeeper is the same thing? The traditional definition of a bookkeeper is that a bookkeeper keeps a record of your financial transactions. While an accountant draws a conclusion out of all the transactions taking place and makes sure you make sound decisions. Let’s dig into the function of each one of these and how different both of these are from each other:
The Function of Bookkeeping:
Bookkeeping is all about keeping a record of your transactions in a consistent way. It’s also a successful way of building a successful financial business. Here’s what bookkeeping comprises of in detail:
- Keeping a track of debits and credits.
- Working on invoices.
- Working on general ledgers, subsidiaries and historical accounts.
- Doing your payrolls right.
So how does one maintain a ledger? It’s one of the main components of bookkeeping, and you ought to know what difference does it make in bookkeeping. A general ledger is a document through which the bookkeeper keeps a record of sales and expense receipts. You can work on a ledger using a software, computer spreadsheet or even a simple lined sheet of paper.
If you own a big business, bookkeeping may get complicated. You have to look out for daily, weekly and monthly transactions. A ledger is your superhero. That supported with other documents makes sure your job is done.
What Does an Accountant Do?
An accountant may know bookkeeping too. But an accountant works with a bookkeeper to derive financial models out of the financial transactions. You can say that, in a way, the process of accounting is subjective as compared to bookkeeping. Here’s what accounting comprises of:
- Working on the company’s financial statements.
- Sorting out the company’s financial statements.
- Figuring out the cost of operations.
- Figuring out your income tax returns.
- Talking to business owners and helping them sort out their financial decisions.
The process of accounting helps you with financial indicators altogether. If you’re keen on the results, you may end up making more profits.
Here’s a short and sweet understanding of the subject: an accountant helps you with strategic planning, financial forecasting and tax planning, while a bookkeeper gives you the data to determine that. In case you want to study this analogy further, and in case you want to see a complete behind the scenes pictures, get in touch with one of our accountants right now.