“Bookkeeping involves the recording of a company’s financial transactions. With proper bookkeeping, companies are able to track all information on its books to make key operating, investing, and financing decisions.”— Corporate Finance Institute
Bookkeepers keep track of the money your company spends and earns. They remind you of your company’s financial position and all transactions that take place within your business. Proper bookkeeping is significant for getting investors, financial institutions, and even governmental support; the collected data will determine whether to loan you money and how much.
“The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company’s operations, financial position, and cash flows.” In other words, accounting is the means of tracking financial activity and analyzing the collected data. This information gives further insight into trends and opportunities that could earn your business more money.
Though they sound similar, accounting and bookkeeping are different. Bookkeepers oversee records and gathers data related to financial transactions within your company. While accountants are in charge of interpreting, classifying, analyzing, reporting, and summarizing the financial information collected.