Bookkeepers and accountants are essential to any business — for very different reasons. Although both professions seem very similar, they’re actually very different. Bookkeeping relates to measuring, recording and identifying financial transactions, while accounting summarizes, interprets and communicates these financial transactions. Now, this may seem a bit confusing to those who aren’t familiar with finances. But there’s so much more to it. Let’s break it down for you.
What is a Bookkeeper?
The Merriam-Webster Dictionary defines a bookkeeper as “a person who records the accounts or transactions of a business”. A bookkeeper’s main function is to record financial data and ensure that the entries inputted are correct. Bookkeepers calculate income and expenses, create invoices, and make bank transactions. They also make sure that accounts balance and put results into various report formats. Bookkeepers can also interpret these reports and explain them to business owners.
What is an Accountant?
The Merriam-Webster Dictionary defines accounting as “the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results”. Accountants oversee accounts and produce tax returns. They must be knowledgeable about financial legislation and ethics. A large part of their role is interpreting data and providing insight surrounding major financial decisions. Accountants adjust entries which have been made by bookkeepers and also analyze how much it costs to run an organization. They have the skills and knowledge to assess if a business, its products, and its services are profitable. The information gathered from these findings is then presented to business owners to help them make informed decisions regarding their business and their business’s finances.
Both professions deal with similar things such as basic knowledge of accounting, financial data, and financial transactions, but both handle each process differently.
Roles Which Are Essential to Any Business
Accountants prepare budgets and financial plan loans while analyzing and interpreting financial data and putting this data into reports. A bookkeeper’s job is to keep the financial records of a business in order. They record and classify financial transactions and data, while accountants analyze this data and take responsibility for the entire accounting process. While both professions are different, they are also both absolutely essential for the proper functioning and success of any business.
About Beta Entry:
Beta Entry provides bookkeeping, analysis, and management consulting for business owners throughout Sussex County, New Jersey (NJ). We offer a wide range of services to help manage financials and business operations. Services include: remote bookkeeping, consulting, budgeting, payroll, accounts payable, accounts receivable.