If there’s one question that we get asked more than any other, it is: what’s the difference between bookkeeping and accounting? Many business owners, particularly when they first start out, are unclear about the distinction and what role a bookkeeper can play in the business. There is however, quite a clear difference and the value that both professional services can bring to a growing business shouldn’t be underestimated.
By way of a simple definition, bookkeeping handles the recording and organisation of financial transactions and data. Bookkeepers are primarily focused on the day-to-day management of the financial data in a business including recording purchases, receipts and transactions. Accounting is the analysis and interpretation of that data. Accountants use this data to look at the bigger picture, analyse the overall financial situation and look at the impact on the business.
Traditionally bookkeeping generally takes care of:
- Data entry
- Bank reconciliations
Accounting is usually responsible for:
- Analysing business performance
- Taxation management
- Financial statements and reports
Essentially, accountants rely on the quality of data generated by bookkeepers to help business owners make critical decisions about the management of their business. It’s also true to say that the lines between bookkeeping and accounting are becoming a little more blurred. The development of online accounting and bookkeeping software packages means that some of the processes that may have been previously undertaken by an accountant may now be done by a qualified, experienced bookkeeper. This can include things like the generation of financial statements, which many software packages now facilitate.
Many business owners may start out trying to manage the day to day financial data for their businesses and come to realise, as the business grows, that it takes a considerable amount of time and focus to stay on top of this. A good bookkeeper will prove invaluable in taking this pressure off. As the business grows further most business owners recognise that the advice of a good accountant is needed to help them decide what the data is telling them.
At Numera Bookkeeping Services, we provide more than most traditional bookkeepers. With significant experience across a wide range of industry sectors, we are able to support you with all the standard bookkeeping services as well as BAS preparation and lodgment, payroll outsourcing services, advice on the selection of accounting packages and software training. If you need the services of a local accountant, our referral partners, MGI South Queensland are on hand to offer more detailed accounting advice. Work with the Brisbane bookkeepers you can trust. Give us a call today on 07 3002 4880 or email firstname.lastname@example.org to find out how we can help your business.