Accounting Bookkeeping – What Is It
Accounting and bookkeeping should run hand in hand with the operation of any successful
business. Because of the large number of transactions and activities a business makes, it is imperative to keep track of its flow of money.
Once the flow is tracked and recorded, the business can then analyze the results. These results will be the basis of making the businesses
To handle this responsibility, a
company needs a department or a division that specializes in accounting bookkeeping. These people are privy to the businesses deepest
financial secrets. Without them, companies would most likely run itself into the ground. This is why it is so crucial to have the best
bookkeeeping services available.
Most people think that accounting and
bookkeeping are the same thing. Well, they are not but both are related, just like sales and marketing. In today’s fast paced environment
(especially in small business) the 2 are usually integrated into the 1 process- accounting bookkeeping.
Firstly it is worth explaining the
distinct differences between accounting and bookkeeping. Bookkeeping is the process of recording,
classifying, tracking and monitoring financial transactions. Quite simply, bookkeeping is all about maintaining the businesses financial
transactions. These financial transactions may encompass; purchasing, loans, mortgages, and any other activity that involves cash flow. In
bookkeeping, the goal is to record and summarize these financial transactions and arrange them into a simple easy to use
Accounting, on the other hand, involves
analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information. The information used by the accounting staff
comes from the data provided to them from the bookkeepers.
Bookkeeping is essentially a component
of accounting. In an analogy, accounting is a tree while bookkeeping are the branches.
In a typical setting, accountants plan
and set up the company’s accounting bookkeeping system. It plans a schedule for a day-to-day record keeping and record turn
Financial software programs have helped
accounting bookkeeping immensely. While many companies still rely on manual methods of accounting bookkeeping, the benefits of using computers
for accounting bookkeeping far outweigh the cost of acquiring the computers and the software. Through computerization, accountants and
bookkeepers can track, record, maintain, and analyze financial records and summaries in a faster, more accurate, and more efficient
Many modern companies also opt for
automated accounting bookkeeping systems. These complex systems essentially allow records to be frequently adjusted as transactions take
place. Templates and workflows can be set up within the program. When an account is then updated, the program automatically makes hundreds of
calculations to reflect that change on the ledgers. This essentially makes the whole process of accounting bookkeeping far more accurate and