Difference Between Bookkeeping & Accounting - Basic Guide

All business needs an accountant to help grow their business. Still many of the professionals are not able to distinguish between a Bookkeeper and an accountant. In this article, I have tried to explain some basic concept of Bookkeeping vs Accounting.

BOOKKEEPING-

Definition- Bookkeeping is the act of recording the financial transactions of any company in a systematically way.

Types of Bookkeeping

There are 2 types of Bookkeeping.

1-Single-Entry System

2-Double-Entry System

Single-Entry System:- This is the 1st type of bookkeeping. It is used for a small business with low transaction.this is used only maintaining record cash like cash received selling and purchasing. It is used to a daily summary record of the book.

Double-Entry System:- This is the 2nd type of bookkeeping. This is the standard method of bookkeeping using only businessman and accountant. This is used for the accurate value of the transaction.

ADVANTAGE OF BOOKKEEPING:-

1. Maintaining all account for a general account to ledger account.

2. It is cost-effective.

3. It is time effective.

4. There is high profit.

5. There are reduce tax liabilities.

6. Peace of mind.

DISADVANTAGE OF BOOKKEEPING:-

  1. Fraudness because of some time the criminal accountant fraud with the company.

  2. Accuracy problem because when the accountant types wrong value or typing mistake.

  3. Time and money because the bookkeeper needs a salary to handle your software bookkeeping.

Read also: Bookkeeping vs Accounting: Whom to Hire Bookkeeper or an Accountant?

ACCOUNTING:-

Definition- Accounting is using to manage your full financial detail like profit or lose in your company or organization.

TYPES OF ACCOUNTING:-

THERE ARE 7 TYPES OF ACCOUNTING

  1. Financial accounting

  2. Public accounting

  3. Government accounting

  4. Forensic accounting

  5. Management accounting

  6. Tax accounting

  7. Internal auditing

1.Financial accounting:-

This is the main part of accounting. It is used the full financial transaction calculate the company. Companies issue financial statements on a routine schedule.This is using to prepare the full financial statement of the company.

2. Public accounting:-

Public accounting provides the service to the client in the worldwide like businessmen, NGO and institution.

3. Government accounting:-

Government accounting to use for analyzing and classifying the all process of government transaction and economically event.

4.Forensic accounting:-

This is providing the accounting to suitable for the court.This is utilize accounting auditing and investigative skills.

5 Management accounting:-

This accounting is the process of analyzing and identifying and communicating the organization for pursuing of an organization.

6 Tax accounting:-

Tax accounting is mainly used for taxes problem. This is the governed by the government rules that follow all the company tax rules.

7.Internal Auditing:-

internal audit is the examination, monitoring and analysis of activities related to a company's operations, employee behaviour and information systems.

ADVANTAGE OF ACCOUNTING:-

  1. Complete the systematic record.

  2. Determination of selling price of the company.

  3. Valuation of the business of your company.

  4. Help in raising a loan.

  5. Facialized audit.

  6. Effective management.

  7. Inter-firm

DISADVANTAGES OF ACCOUNTING:-

There are no any disadvantages of accounting but without knowledge very highly loses in your company or firm like as-

  1. Profit or loss problem.

  2. Proper transaction bill problem.

  3. Employee salary problem

  4. Effect on your entire business.

Thanks for reading. Check out this article to know the things you should know before hiring an accountant.

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