Accountant or Bookkeeper ? Know the Difference and Which will be ...

Bookkeeper or Accountant ? What?s the Difference and Which Do I Need?

Your Business Might Benefit From Both

What are the differences between bookkeeping and accounting, and similarly, the differences between a bookkeeper and an accountant?

Usually, a bookkeeper performs bookkeeping, and an accountant performs accounting. But in some instances, a bookkeeping person in Schaumburg is called a payroll bookkeeper, a bookkeeper accountant, or an accounting technician. And certainly, an accountant is able to do bookkeeper responsibilities.

Knowing the differences between bookkeeping and accounting will help clear up both the titles as well as the service areas your business needs.

Bookkeeping

In large companies, bookkeeping is carried out by departments like Accounts Receivable, Payroll, and Accounts Payable. Those who perform these duties are usually referred to as clerks. In small companies, the bookkeeping may all be done by just one person. This person could enter the data and hand it off to an accountant, or might perform the entire process.

All bookkeeping responsibilities are mechanical by nature. The processes are typically cyclical, occurring monthly, and consist of entering transactions, making adjustments, and preparing reports. Accounts Payable includes entering all purchase orders or bills and recording all checks. Accounts Receivable includes recording all payments from customers, preparing all invoices, and entering all sales.

A comprehensive bookkeeper does it all and also compiles the data into the General Ledger and prepares financial statements. Analysis of the company?s financial records is not done by a bookkeeper.

Accounting

The accounting process starts with organizing and implementing the bookkeeping system, then overseeing it, and interpreting the final results. Accounting is less mechanical and more subjective in nature than bookkeeping.

The bookkeeping system needs to be set up specifically to benefit the business by capturing and calculating useful data in a way that is not overly burdensome to the person doing the data entry. Every month, the accountant ensures the system is functioning properly and presents financial statements which aid in management?s decisions and understanding of the financial well-being of the company.

Accountants usually supervise the bookkeepers in large companies because of their extensive knowledge of the bookkeeping system and tasks. The entire accounting and bookkeeping functions are overseen by the Controller.

All of the roles in the accounting and bookkeeping process are performed by one person in a small business. That person is often not an employee of the company but rather is hired from an accounting firm. Often the bookkeeping is done in-house, and an outside accountant analyzes the financial health of the business and manages the work of the bookkeeper.

In any event, the accountant is going to make adjusting entries and prepare the company?s financial statements. An accountant helps small business owners to be aware of the financial effect of past and future decisions.

If you are searching for an outstanding accountant in Schaumburg or somebody to help you with your accounting firm needs in Schaumburg then this accounting service must be your first call.

Source: http://artyapt.com/blog/accountant-or-bookkeeper-know-the-difference-and-which-will-be-the-one-for-you/

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