The first thing you should know is that bookkeeping and accounting are not the same. Bookkeeping is the process of identifying, tracking, and measuring a business’s financial transactions. Accounting occurs later on in the process. It deals more with taking that information that was gathered in the bookkeeping stage and using that to summarize, interpret, and analyze for reporting purposes.
The main objective is to keep records of financial transactions and organize them in a systematic manner. The complexity of bookkeeping varies depending on the size of the business but will most likely always include the creation and management of the following accounts: cash, accounts receivable, inventory, accounts payable, loans payable, sales, payroll expenses, and purchases. Properly maintaining those records requires bookkeepers to be accurate and to have an acute attention to detail.
An accountant takes the data provided by the bookkeeper and uses it to interpret financial insights for the business owner. They are usually responsible for performing audits, reporting tax returns, income statements, and balance sheets. These reports are important to the success of the business as they provide a better understanding of the overall financial state of the business, what can be done, and forecast where the business can grow in the future.
At Bakersmith Bookkeeping, we pride ourselves on being able to meet our client’s needs and provide them with custom-tailored bookkeeping and accounting services. We make sure that your financial affairs are in order so that you can get back to what is most important– running your business. If you are interested in our services or have any kind of accounting and bookkeeping needs, feel free to contact us.