![]() Every business deals with money in some regard, and keeping thorough records of all incoming and outgoing transactions is crucial to its operations. What sounds like a seemingly small part of a company actually has a huge impact on the way it operates. You don't need the same level of precise knowledge and experience to do the job well in a new industry or location. The bookkeeping process - while it has its own quirks and specificities - is replicable from country to country. And tax accountants, specifically, will often be experts in the tax laws for their own country or state. You'll frequently come across tax accountants, internal auditors, and financial accountants. ![]() As the team at Shmunky explains, "the primary objective of bookkeeping is to record all the financial transactions in a systematic order, while accounting assesses the financial situation of the business."Īccounting can also be far more specialized. Accounting refers to everything regarding the financial process of a company, including the recording, interpreting, classifying, analyzing, reporting and summarizing of financial data.Īccountants deal with tax laws and issues, build lots of reports, and try to take insights from financial data.īy contrast, bookkeeping is more strictly about recording data. ![]() It's important to note the difference between bookkeeping and accounting, as the two are often confused. The difference between bookkeeping and accounting These platforms often work by using a laborious double-entry system that validates both the debit part (taking money from one account) and credit part (depositing it into another account) of the transaction. While they're not written into physical books anymore, they still need to be entered into a digital system together with an associated document - depending on the nature of the transaction this can be anything from a bank statement to an invoice. Managing incoming financial streams, like customer paymentsĪt its core, bookkeeping is primarily about recording incoming and outgoing transactions. In a modern business it can include a large variety of tasks, such as: Today, however, bookkeeping covers a lot more than that. It started off as a very basic way of keeping track of money moving between people by writing everything down in a system of physical ledgers and individual account charts. It has a long history - ever since humans started doing business, we started recording transactions as well. What is bookkeeping?Īn important part of any company, bookkeeping refers to the continuous tracking and indexing of all financial transactions. ![]() In order to better understand why it's so important, we're going to take a closer look at the history of bookkeeping, its future and how to effectively implement it in your business. And you're not just doing it for the tax authorities, either - it can provide a vital look into the heartbeat of your company, offering a view on how well it's performing and where you can make improvements. While you might want to focus on growing your company, building your product and getting it out there, keeping your administration comprehensive and up-to-date is just as important. However, you'll quickly come to realise some of the less thrilling parts of it - and bookkeeping is definitely one of them. Running a business can be exciting - especially when you're just getting started. ![]()
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