As a provider of accounting and bookkeeping services to Arizona small business owners we are often asked what the difference is between the two. The easy answer is that while the two are related they aren’t the same.
Here are the key differences between bookkeeping and accounting:
- Bookkeeping is part of Accounting; it is a record of the day-to-day transactions of the business. Typically these transactions are tracked on a monthly cycle.
- Bookkeeping tasks include tracking and recording transactions like deposits, withdrawls, invoices sent and received and expense tracking.
- Accounting takes all the bookkeeping information to create financial reports such as Proft & Loss (P&L) and Balance Sheets. Typically these are tracked and reviewed on a quarterly basis.
- From the financial reports an acountant can help a business owner with business structure (LLC, S-Corp, etc.), tax planning and tax preparation.
- In small businesses the bookkeeping and accounting functions are often combined. Whereas in larger companies and corporations the functions are separated.
- A large corporation may have bookkeeping clerks and accountants in staff.
- As businesses grow so does their team so a payroll clerk will become part of the accounting team as well as receivables (money owed by others, collections) and payables (money owed to others).
AT BASC Expertise we offer a complimentary consultation to help you understand the accounting services we offer and how we can work together. Call us at 480-355-1398 to schedule your appointment today!
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