The bookkeeping process carried out systematically and thoroughly, resulting in a complete summary of notes. This bookkeeping is done to ensure that every financial transaction that occurs within the company is well documented. So that you can get a real picture of income and expenses at the end of the accounting period. The part that is responsible for handling the bookkeeping process is the bookkeeper. He is responsible for transaction records every day. The professional bookkeeper, like the Amanda BAS Agent Sydney, must ensure that every transaction that enters, leaves, goods sold, goods purchased, costs incurred, and others are all documented.
Now we turn to account, which is just a business term. The term for the whole procedure, from recording transactions to finally financial statements submitted at the end of the period. So it can be said that bookkeeping is the foundation of accounting, being part of the overall accounting procedure. In the accounting process, financial transactions are not only recorded but also organized and grouped according to certain groups. So from there, it will produce a clearer summary to be presented to interested parties. The goal is not only to document transactions but also to provide a clear view of the company’s finances.
It can be concluded that between bookkeeping and accounting there are the following differences:
– Bookkeeping is the activity of recording financial transactions while accounting, it is not only recording but also classifying, summarizing, measuring, reporting, and evaluating the entire transaction so that it becomes a unitary financial statement
– Bookkeeping is done by a bookkeeper while accounting is done by an accountant.
– Accounting records can be used as a basis for making managerial decisions, while bookkeeping cannot be used for that. because it is only a record and does not directly indicate a financial condition.
– Financial reports are part of accounting, but it is not part of the bookkeeping process
– In the bookkeeping process, the tools used are journals and ledgers only. As for accounting, the tools used are cash flow statements, income statements, and balance sheets.
– Because it is simpler, bookkeeping can even be done by junior high school graduates. In contrast to accounting which requires deep enough analytical skills and knowledge, so to handle it requires special expertise in accounting.