Accounting vs. Bookkeeping – All You Need To Know

For any business organization, big or small, Accounting and Bookkeeper In Auckland are the two very important aspects. In simple words, Bookkeeping is the act of recording every financial transaction. On the other hand, the accounting includes interpretation, classification, analyzation, reporting and briefing the financial figures.

To a layman, both bookkeeping and accounting may appear to be same as both have to deal with the financial transactions. Knowledge of accounting is also required for both the functions and making financial report is to be generated. But, in this read you will come across the differences between the two.

Major Differences

The one major myth is that both bookkeeping and accounting are the same thing. They may apprear to be same to you, but they are really different from each other. Clearing the doubts, here are the major differences listed below –

Definition

• Bookkeeping: Bookkeeping includes identifying, measuring, and recording of every financial transaction of the business organization.
• Accounting: Accounting includes summarizing, interpreting, and communicating every financial transaction, which are classified into the ledger account of the company.

Decision Making

• Bookkeeping: The decisions for the organization cannot be made based upon the data provided through bookkeeping.
• Accounting: The management can make decidion for the business, based upon the data provided by the Accounting experts.

Objective

• Bookkeeping: The proper and systematic recording of every monetary transaction of the firm is recoded through bookkeeping.
• Accounting: The major objective is to measure the financial soundness of any organization. Moreover, the same is to be communicated to the respective authorities for any financial decision making for the business.

• Financial Statements

• Bookkeeping: There is no requirement of preparing financial statements.
• Accounting: In accounting, preparation of the financial statements is important and mandatory to help in any financial decision making for the authorities.

Skills Required

• Bookkeeping: There is no need of any specific skill set required for bookkeeping. Basic accounting knowledge would be enough.
• Accounting: In accounting, the personnel needs to have special skills in order to handle the analytical and complexity of the process. The Accountant In Auckland is available with all know-how about the segment and known to deliver error free reports and analysis.

Analysis

• Bookkeeping: There is no analysis of financial transactions required in bookkeeping. The is easily available and known for the most professional services at reasonable prices.
• Accounting: In accounting, the data from bookkeeping is used as scratch to interpret and analyze the transactions. Further, compiling the same to create a financial report for the authorities.

Types

• Bookkeeping: Talking about the types, in bookkeeping there are two types (i) Single entry bookkeeping, and (ii) double entry bookkeeping.
• Accounting: There are so as such types in accounting. Thus, the department is responsible for making budget for company and proposals for loan.

Accountrix is to trust if you are looking for Chartered Accountant In Auckland. The professionals are well-versed with the knowledge and is also bearer of all relevant certificates that reflect the authenticity and precision in the service. The Accounting and bookkeeping services are highly popular in Auckland as these help business organizations to plan and strategize their financial business plans.