One of the most important aspects of any business is finances. Without proper money management, a business can’t be successful. It is always an option to handle the financial aspect of your business on your own, however it can be a very complex and time consuming task.
There are several different types of financial professions that are designed to help your business prosper. Often times, people often consider bookkeeping and accounting one profession, however they are different and both are vital to your business success.
Here is the difference between a bookkeeper and an accountant so that you know the role each one plays for your business.
With the new age of technology, the thin line between bookkeeping and accounting is disappearing slowly. There is now a variety of bookkeeping and accounting software that makes these tasks easier for professionals.
Majority of bookkeeping software includes financial statements and analysis, which further confuses the definition of the two professions.
A lot of financial companies are transitioning to using digital software and resources to complete these tasks, making them more efficient and creating an ease of access to all financial documents.
Although these two professions are starting to merge together with technology, there are still key differences that are important to know when running a business.
Compared to an accountant, a bookkeeper has a more active role in the day-to-day financial responsibilities of a business.
They take care of the elements that keep the business up and running, which include things like creating invoices, keeping track of billing, running payroll, and creating general ledgers to document all transactions.
The core skill focus of bookkeeping is data entry and coding. They must ensure that all financial data is correct and coded to the right accounts so that financial information is both accurate and easy to access.
Though accountants also deal with the ongoing finances of a business, the main difference is that they typically handle the finances that are already finalized and closed out.
Bookkeepers maintain current and active records of financial transactions, while accountants take those records and translate them. They interpret the financial data that the bookkeeper documents, compiling the information into financial reports.
These reports give businesses an idea of their financial progress and current standing. This helps to analyze the growth of a business and gauge any changes that may need to be made for improvement. Accountants also handle the tax portion of a business, providing tax planning and advice.
In short, an accountant and a bookkeeper complement one another in the financial world. They are both equally important to the success of any business.
Bookkeepers maintain an active record of all business transactions, while accountants interpret the records and act as financial advisors for businesses.
PL Consulting for all Your Financial Needs!
At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more.
Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.
To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://plcfo.com/contact/