People often confuse bookkeeping and accounting. It’s understandable because the two are related to each other. Accounting relies upon bookkeeping and both services enable the survival and growth of your business.
The experts at TPI Group are here to help you manage and maintain your business’s health.
What Is Bookkeeping?
Bookkeeping is the daily management of your business’s financial data, particularly transactions. The type of transactions your bookkeeper will record include:
- Payroll processing
- Spreadsheet updates
- Bank statement reconciliation
Essentially, this service focuses on data collection and organization, so when an accountant is brought in to review everything, your information will be in place for them.
What Is Accounting?
Your business relies heavily on accounting because it guides your business towards success. Accounting is the step after bookkeeping where business owners are advised on strategies that will improve and grow their business.
For your business to flourish, accountants need to prepare monthly or quarterly reports using the financial statements gathered by bookkeepers to assess the health of your business. Accounting also involves the preparation of statements and reports that are sent to banks and various governmental agencies.
You may not realize it, but accountants have a lot on their plate for a single client. They take your financial data and do:
- Interpretation
- Classification
- Analysis
- Reporting
- Summarizing
A certified public accountant (CPA) is an accountant that possesses a licence to provide public accounting services. CPAs and accountants in general can also advise you on your taxes and assist you with tax planning.
How Are Bookkeeping & Accounting the Same?
Because services go hand in hand, people mix them. Here are a few ways why:
- Bookkeepers and accountants deal with financial information.
- Bookkeeping requires a knowledge of basic accounting principles.
- Bookkeepers sometimes create the types of reports accountants must also generate.
- Accountants sometimes do bookkeeping with the help of special software programs.
What Are the Differences?
Accountants have a broader view of your financial information. They can see both your personal and professional finances while a bookkeeper would see only your professional finances.
Nowadays, bookkeepers are entering into business strategy and advisory capacities, and accountants are taking on tax resolution and coaching, as well as financial planning.
Bookkeepers file payroll and sales tax returns. Accountants file personal and professional tax returns.
Bookkeepers cannot file audits or attestations, but accountants do. They can also provide certified financial statements.
Manage Your Financial Records with TPI
We can assist you in many financial aspects to keep your business running smoothly. Our team of CPAs are available year-round, so you can look us up just for tax season or have us do ongoing reviews of your business’s health. We conduct audits, payroll processing, and other DCAA services for contractors and small businesses in the healthcare, construction, government, and IT industries.
TPI Group provides small business owners and high-income individuals with bookkeeping and accounting services. We’re still serving clients during the COVID-19 pandemic, so contact us today!