Accounting or bookkeeping is the meticulous art of money management. Often, the word accountant, triggers images of bespectacled professionals who are good with numbers. Accountants are integral to any organization that believes in smart expenditures and smarter maintenance of the records. Accounting or bookkeeping facilitates the smooth financial functioning across organizations.
The accountant is the financial backbone of the business and his responsibilities range from book keeping to evaluating the account to preparing the financial reports and providing expert advice on the tax evaluation and investment plans. There is however a slight difference in accounting and book keeping. The process of accounting involves articulate recording, interpreting, classifying, reporting and summarizing financial data. Book keeping on the other hand, involves the process of recording the financial transaction. Since maintaining records of financial transaction is crucial to accounting, bookkeeping is known as the foundation of the accounting process.
The advantages of accounting and bookkeeping:
Assists in financial management and analysis
Larger companies, medium and small business enterprises often need the assistance of qualified accountants to help them manage the resources effectively so as to ensure systematic follow-ups and effective and timely payment for suppliers. Effective accounting and book keeping ensure accurate cash flow management.
Bookkeeping helps track tax obligations
Organized balance sheet helps in effective management of tax returns and cash flow and the evaluation of profits and loss. Tax advisors are the people to turn to for sound advice on tax management.
Assists in Business Planning
The accurately maintained balance sheet helps measure the profit and losses incurred, to monitor the track that the company is on. Accurate financial analysis helps the business to strategically move forward.
Efficient and error free Record Keeping that complies with the legal norms:
Timely book keeping ensures that marketers are able to retrieve data especially during the time of audit.
The major difference between accounting and bookkeeping:
Bookkeeping is the meticulous approach of recording the expenditure and investments and keeping track of the profits or losses incurred. Purchase of services or goods are also recorded to assist for future business ventures. Bookkeeping is generalised and shows the estimates and may not always focus on accurate figures. On the other hand, accounting is distinguished from bookkeeping as it provides more detailed records with meticulously scrutinized entries. Accounting is accurate and meticulous. Reach leading accountants from different parts of the world by investing in the accountants email database from Dunlopmarketing, a pioneer in email database management.
Although distinct, accounting and bookkeeping are integral to efficient financial management so much so that they are like the two sides of a coin. They pave the way for knowing the actual financial status and help businesses to understand the pitfalls and work on it competently.