To the layman, bookkeeping and accounting sound like the same thing. Isn’t it just compiling lists of numbers and formulas to understand what’s going on financially for a company? There are, however, differences between bookkeeping and accounting which can help you better understand the needs of y our company or small business.
Every business needs bookkeeping AND accounting, though many begin only with bookkeeping. Bookkeeping is the process of recording each of your financial transactions – sales and purchases. It’s the basic math needed to keep your business profitable and to be sure that you don’t run out of money or inventory. Bookkeeping is the first critical step to keep your business alive. When you’re ready to get more serious, or as your business scales far beyond your initial bookkeeping skills, it’s time for some accounting.
Accounting is much more than just bookkeeping. Accountants do keep track of daily transactions, but instead of simply keeping track of the company’s assets, accountants take all of those purchases and expenditures into deep analysis for the good of the company. Accounting includes the analysis, classification, summary, and even recommendation.
Accounting is a more complicated process than bookkeeping, which is why accountants need further certification than bookkeepers. Accountants need a bachelor’s degree or a CPA certification before they can provide accounting services for a company. Accountants are able to look at the data and determine what is happening for the company on a day-to-day basis, and then make recommendations for future moves, price changes, or other relevant details to benefit the business. Accountants are able to see what business owners and operators cannot, simply by analyzing the data.
We recommend that everyone utilizes accounting practices for your business, as accountants can offer much more applicable services to help maximize your business profits. Bookkeeping is also important, and employing a bookkeeper you trust to catalog your finances is the best way to keep your business healthy and operating efficiently.
Do you need bookkeeping help? Are you looking to take your business from bookkeeping to accounting? Are you a bookkeeper looking to improve your certification to offer accounting services? If you are interested in the services of bookkeeping, accounting, or maximizing your business profits, Universal Accounting School offers courses and certification to help you meet your business goals. We help people learn bookkeeping skills, advance to a CPA level certification, offer profitable accounting services for others, and more. If you’re ready to take the next steps, come see how Universal Accounting can help.