Many people use the terms “accounting” and “bookkeeping” interchangeably. While both of these jobs are crucial for keeping a company’s financials in order, they are different processes. The guide below explains what is involved in each.

Bookkeeping

A bookkeeper is responsible for recording all financial transactions that a business has and putting them into chronological order. They create a ledger, which is a document that contains records of every payment the business has ever made or received. Sometimes, this is made with specialized software; other times, bookkeepers use a basic computer spreadsheet.

These professionals may also complete payroll, pay suppliers, and keep tabs on inventory. Having such accurate records of all your business transactions can make tax season much simpler and can also prepare you for a potential audit. 

A bookkeeper generally doesn’t have to have any formal education, but some employers may require an associate degree in business or accounting.

Accounting

An accountant takes the financial information collected by a bookkeeper and analyzes it. They will then discuss the financial situation with company leaders to help them make better business decisions in the future. For example, they can look at the cost of hiring new staff against the profit earned from increasing productivity. Their keen eye can come up with solutions for existing financial problems and predict other issues before they arrive. Often, they also prepare tax returns on behalf of their employers.

An accountant typically has to have at least a bachelor’s degree in accounting. They’re also encouraged to obtain additional professional certifications, like becoming a Certified Public Accountant (CPA). 

If you’re looking for bookkeeping or accounting services, turn to Young Hoy & Burnett CPA in Texarkana, TX. The company has been providing quality accounting, payroll and bookkeeping, tax planning, and small business consulting services for over 40 years. They’re committed to staying up-to-date with industry changes are known for their excellent customer service. To arrange a consultation, call (903) 794-2211. Visit their website for more information about their capabilities.