June 8, 2007, Newsletter Issue #31: Accounting Bookkeeping
Tip of the Week
Sometimes the distinction between bookkeeping and accounting duties is confusing. Many times, in our modern times, they overlap. However, there are some main differences.
Bookkeeping is defined as mainly clerical in nature. It consists of being responsible for keeping the company records. Bookkeeping is recording the daily transactions affecting accounts. Bookkeeping involves recording, sorting, and summarizing the company data in a method prescribed by the entity.
Accounting, on the other hand, technically involves designing the record keeping system, preparing reports from the recorded data, and interpreting the reports. Interpreting the reports is the main area of difference between bookkeeping and accounting services.
Many entry level accountants perform bookkeeping. This is common in smaller public accounting firms, or smaller firms in general. Overall, accountants must possess greater conceptual thinking, analytical skills, and a greater knowledge base than the bookkeeper.
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