Accounting vs Bookkeeping

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Accounting vs Bookkeeping

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Accounting

• Accounting is four stage process of recording,
  classifying, summarizing and the interpretation
  of the financial statements.
• The four stages such as follows
• Recording Business related transaction being
  recording in the books.
• Classifying Transaction being sorting and
  categorizing into well manner and meaningful
  order.
• Summarizing In this process, the accounting data
  has a brief statement or encapsulate the
  accounting data.
• Interpreting In this, the financial data
  examined and used to assist decision making.

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• Accounting is the system that is used for keeping
  track of data including people, and records the
  data transactions history, as well as taking the
  information i.e. obtain through the bookkeeping
  process and using the information to analyse the
  results of the business . Accounting is the
  system that provides the reports and informations
  needed for management to make decisions as to the
  direction of the business, as well as issues such
  as taxation, Sales Tax etc
• An Accountant is usually someone who is qualified
  in Accountancy, through the completion of a
  university degree. And an Accounting Professional
  helps you to grow your business.

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Bookkeeping

• Bookkeeping is a part of accounting. It is a
  mechanical aspect of recording, summarizing, and
  classifying the transactions.
• In this keeping the books of account is the
  subject in Bookkeeping. The main role of
  interpreting all these data into information for
  management to act upon is excluded.
• It is largely a mechanical process and does not
  involve in any analysis of financial transaction.
• Traditionally all the records are keep in a book,
  hence it is known as Bookkeeping.

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• Now these days, bookkeeping is performed as a
  bookkeeping package software. but some of the
  books are still used such as daybook, cash
  books, journal, and General ledger.
• A good Bookkeeper can also act as the canary in
  the tunnel.
• A bookkeepers function is leading one of the
  recordings transactions in journal and posting
  the ledger, and is sometimes referred to as an
  accounts clerk.
• A few activities Bookkeeping does
• Input of invoice and voucher details into the ERP
  system.
• Receiving and recording payments by customers.
• Efficiently processing payroll information.

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What is the difference between Accounting and
Bookkeeping

1. Bookkeeping involves with the keeping
   systematical records of the companys financial
   activities, whereas the accounting is the next
   sanction, which analyse these records to prepare
   different proposals and reports.
2. Bookkeeping is the procedure, which helps the
   management to manage day-by-day activities of
   company, whereas the accounting settles or
   justify these financial actions and find their
   reason.
3. Bookkeeping is the beginning stage and acts as a
   base for accounting, whereas the Accounting
   begins where Bookkeeping ends.
4. Management cant take decisions based on
   Bookkeeping but on Accounting they take.

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• 5. The objective of Bookkeeping is to keep proper
  and systematic records of financial transactions,
  but The objective of accounting is to ascertain
  the financial position and further communicate
  the information the relevant parties.
• 6. Financial statements are not prepared in
  Bookkeeping but in Accounting financial
  statements are prepared on the basis of records
  obtained through bookkeeping.
• 7. Bookkeeping doesnt require any special skills
  as it is mechanical in nature, but in Accounting
  requires special skills due to its analytical and
  somewhat complex nature.

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  Consultant, feel free to call us at
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  expert to help with setup, bookkeeping,
  accounting, and more.