Running a business organization involves numerous financial
transactions. A business involves various operating expenses like office
expenses, supplies, insurance, travelling expenses, advertising costs, bills
payable etc. Similarly there are various cash inflows in a business like sales,
return on investments etc. It is necessary to maintain all these records in
order to ascertain the profitability of the business. Proper maintenance of
records is also necessary for avoiding frauds. These records also help the
business entrepreneurs in future planning.
Accounting and Bookkeeping Services are two methods of keeping the records of financial
transactions of a business organization. Some people tend to mix these two
terms with one another. This blog offers a brief insight in to the factors
which differentiate these two terms.
Bookkeeping is a simpler process than accounting. It only
comprises of recording business cash inflows and outflows. Whereas accounting is
a much more complex process. It includes simplifying, differentiating, monitoring,
recording and summarizing financial data. Accounting is essential for determining
the financial viability of a commercial venture. It also gives the
entrepreneurs or managers an insight regarding the future scope of the
organization. Whereas bookkeeping can be used to gauge the future viability of
a business organization. Bookkeeping is mainly meant for small scale business
enterprises whereas accounting is utilized by large scale commercial ventures.
Any literate person can perform bookkeeping duties with a
little bit of guidance. Whereas performing accounting is not so simple. In
order to work as an accountant, the minimum eligibility criteria is a
graduation degree in the field of accounting. It is obvious that an accountant
will charge higher salary than a bookkeeper.
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