Accounting Vs Bookkeeping, Is There a Difference Between the Two?

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Accounting vs bookkeeping, is there a difference between the two? Hello today guys! I’m so excited to be able to share with you guys such a great topic. Bookkeeping and accounting are like fraternal twins in my opinion. They both are alike but are so different at the same time. Today we will be going over each of the characteristics of both that make them stand out from each other my friends. No more waiting let’s jump right in.

Bookkeeping

Starting with bookkeeping my friends, let’s talk about purpose of bookkeeping. The purpose of bookkeeping is to record daily transactions of a business. Things that come along with that is recording any sales, purchases, receipts, and payments made each day. Not only that but as well as maintaining and balancing subsidiaries, general ledgers, and the historical accounts. While recording post of debits and credits. We can’t leave out producing invoices. How else will we get paid. Lastly but definitely not least we have completing payroll. Everybody has to get paid right? All this is to make sure your records are done accurately and timely my friends. All this will end up going to the accounting process.

Required Skills

I wanted to add this part because I feel like this one is a huge difference between the two as well. There are not many skills required for being good at bookkeeping. The first thing I feel like you need to be able to do is pay attention to the details. Make sure you’re going over everything twice, every number is where it should be, and everything add up. Next, you have to be able to understand of financial transactions. So still nothing crazy so far but we’re not done. Lastly, we have to know how to use some kind of bookkeeping software. This is going to make thing so much easier for you. That’s really all the skills you will need for bookkeeping.

Accounting

Now the whole process of accounting is to summarize all the information gathered from all the bookkeeping information. This is where all of your financial statements will come from. Your income statements, balance sheets, and cash flow statements will all come from here. Or maybe you have hired an Accountant, and they will provide them for you. This way they can handle the major stuff like performing audits. They will also handle other tasks such as preparing tax returns and making sure your business is compliance with tax laws. As well as analyzing your financial reports to help aid you in decision-making for the business. Lastly, they will be able to provide you with information about your financial future that will help budgets and assist in strategic planning.

Required Skills

As for the required skills for accounting you going to need some real financial knowledge. You can either get it for real world experience learn from someone or college my friends. You’re going to need some analytical skills. Some real in-depth knowledge on the accounting principles and regulations as well. You will also have to be very familiar with accounting software. Overall, you just need a very strong understanding of financial analysis and reporting my friends.

Bonus – Money Management

Are you getting up early each morning for work? Getting to work and doing your job to the best of your ability? Just so you can live paycheck to paycheck. Let’s talk about some ways we can help improve this problem. If someone is living paycheck to paycheck they might have bad money management skills or not making enough money. We’ll focus on money management skills this time but if after this you’re still paycheck to paycheck you might need a part time job. I’ll give you some tips and break them down for you on money management skills.

* Tracking your spending 

  This will help improve your your finances so much because you can see where your money is going. You may be eating out too much and not even realizing it. You might have too many subscriptions plans and can do without a few of them. Spending too much on a girlfriend or boyfriend is another sneaky one.

* Monthly budget 

  When you’re coming up with your monthly budget try and be as realistic as possible. Don’t say your going to cut back on how much you spend on food to 75 dollars a month. Just say you’ll go from eating out 4 times a week to 2 times a week. Small things like this will make a big difference.

* Savings

  With all your cut backs you should have some money left over. With all that extra money you should put it right into your savings account. Extra money in your savings account is extra money in your pocket.

* Paying your bills

  Paying your bills on time at the end of the month. It looks great on your credit. In fact, put your bills on an automatic payment plan from a credit card and pay off your credit card at the end of the month. Sit back and watch your credit score go up.

* Investment strategy 

With some of the money you save on cut backs put it towards investments. Say you save 50 dollars a month. Take 25 dollars put it in savings, 25 dollars into investments. With the right investments you can be set for life my friends.

  Try following these steps for a few months my friends and see if anything changes. If you like the change that you see, stick with it. These steps should improve your financial issues. This should help you from living paycheck to paycheck. And set you up for a better future.

Summary

I hope this gives you guys a better understanding of why I compared accounting and bookkeeping to fraternal twins. Yes, they both involve number and record keeping. But they are using very different. When it comes to my financial records, I personally like to handle my booking myself for a while. Then I’ll have someone else start bookkeeping with me. Until I feel they can handle it themselves. And I’ll just look it over. I also have an account that I trust to help handle things as well. I hope this gave you guys a better understanding between the two. As always, I want to thank you guys for your time and the visit. Please come back anytime and tell your friends about the blog. Let me know if this post was a help and what you guys want next. Good luck out there!