If you're looking for someone to handle your business or personal finances, you've likely seen the terms bookkeeping and accounting used a lot and, often, interchangeably. But there are some specific differences between these services. Here’s what you need to know to choose the right option.
Understanding Financial Services
Bookkeeping Is a Type of Accounting
Accounting is an umbrella term that encompasses the many facets of financial recordkeeping. Accounting tends to be more concerned with the big-picture view of the personal or business finances being handled. Bookkeeping, on the other hand, is more focused on specific transactions and the day-to-day financial operations of the client.
Accounting Is Procedural, While Bookkeeping Transactional
An accountant often works more with developing the procedures involved in creating an effective bookkeeping system for the client. A bookkeeper uses the accounting system that has been put in place to efficiently balance budgets, run reports, and reconcile financial information. In other words, accountants make the rules and systems that bookkeepers follow.
Accounting Deals More With Tax Planning Than Bookkeeping Does
Since bookkeeping and accounting firms are in the business of numbers, the IRS plays a role in both lines of work. But accountants deal more with tax planning and preparation than bookkeepers do. Accountants are frequently called on to provide more analytical financial work and forecasting, which figures into how an individual or business plans for and pays their taxes. Bookkeepers may use the findings of the accountant's analysis in their work, but the details of examining, planning, and prepping taxes fall under the realm of accounting.
Whether you need bookkeeping or accounting services, trust the professionals at Tostrud & Temp, S.C. With more than 35 years of experience, they represent commercial and residential clients throughout the La Crosse, WI, region. Call (608) 784-8060 or visit their website to schedule an appointment today.