01/24/2025
I received many questions to clarify the difference between Accounting and Bookkeeping?
Here's a quick summary regarding both services:
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Bookkeeping: process of recording daily financial transactions systematically.
Accounting : process of analyzing, summarizing, and interpreting financial data for decision-making.
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Bookkeeping is to maintain an accurate record of all financial transactions.
Accounting is to assess financial health, prepare reports, and assist in financial/ tax planning
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Bookkeeping focuses on Recording, Classifying, and Reconciling financial data.
Accounting focuses on Financial analysis, Reporting, Tax preparation, and Strategic planning.
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Bookkeeping:
- Records transactions such as sales, expenses, payments, receipts
- Reconciles Bank and credit card transactions
- Categorizes expenses
- Manages accounts payable & receivable
Accounting:
-Prepares financial statements (Profit & Loss, Balance Sheet, Cash Flow)
- Forecast / Budget/ Analyzes your Financial statement/Transaction
- Tax planning and compliance
- Analyzes financial performance
- Ensures Audit compliance
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Bookkeeping : QuickBooks, Xero, FreshBooks, Excel, Some accounting software, etc..
Accounting : Power BI, QuickBooks, Sage, ERP systems, Advanced Excel, Oracle, etc..
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