Every business must have reliable systems in place for both bookkeeping and accounting. Bookkeeping is more about keeping records that can then be used for the accounting of a business, so accounting is a much broader term and includes many different sections.
Using the principles of accounting, bookkeeping is a more detailed term relating to a specific process. This process, which includes gathering, storing and organising the financial transactions and records of a business, is needed to complete the accounting. The information collected in bookkeeping can be daily operations, transactions, financial statements and tax reports, all of which must be accurate, complete and collected on time. Bookkeeping Kent can be processed in-house or by an outsourced bookkeeping or accounting firm.
Accounting is a more complicated process and involves many parts such as designing the system for the bookkeeping, and analysing the recorded information to organise the finances. Accountants will prepare reports such as financial statements, tax returns and other reports that are used by the managers to observe how successful a business is. The data produced by accountants will work out sales revenue and expenses, which can then determine if the company made a profit or loss over the time period.
Bookkeeping is needed for accounting, although they are different processes. Both of them can be completed by the same employee or team, or they can be done by separate professionals. It is often beneficial to hire a professional firm to complete both processes to make sure they are accurate.