Though business accounting and business bookkeeping are similar, they do have their differences.
What Is Business Bookkeeping?
Business bookkeeping usually comes a step before business accounting. Business bookkeeping is the act of gathering and recording financial information that will be passed on to business accounting to be processed and analyzed completely.
Business Bookkeeping Tasks
Business bookkeeping is a vital step in the financial process of running a business. Bookkeeping tasks can include:
- Recording transactions
- Creating invoices
- Maintaining business ledger
- Recording debit and credit
- Managing payroll
What Education Does a Bookkeeper Need?
Becoming a bookkeeper does not require any special education, though most bookkeepers will at least have a degree. It only requires the drive and ability to learn financial processes and terms. There is an option to get a certificate, but this is not required to work in business bookkeeping. To receive certification, work experience is normally required. Therefore, you will need to obtain a job in business bookkeeping before being able to become licensed. The certification doesn't change a whole lot, but it does exhibit to your employer that you are driven and dedicated to your career.
What Is Business Accounting?
Business accounting is when an individual or team of accountants analyze things like recent transactions and financial activity to create financial statements. The information they analyze is oftentimes the information that comes from the bookkeepers. There is much more to business accounting than just the financial statements, though. Business accounting and accountants are also in charge of the tax aspects of a business.
Business Accounting Tasks
Business accounting includes more tasks than most may have thought would fall under this category. Those tasks can include:
- Reviewing incoming/outgoing cash flow
- Preparing statements
- Checking for unpaid bills
- Completing W-2s for employees
- Performing audits
- Advising on financial decisions
- Preparing and pay taxes
What Education Does an Accountant Need?
All accountants must earn a bachelor's degree. There is an exam that will need to be taken after college has been completed. Once this exam is passed, you would receive your license in the state you reside in and completed the exam in. Requirements may vary by state. Depending on the state, you may need to complete more than an exam to receive your license. It would be best to study the laws and requirements of your state before taking the exam.
So, what's the difference? Business bookkeeping is step one. Bookkeepers are in charge of recording and documenting everything correctly and efficiently for the accountant. The bookkeeper's work will then go to step two, business accounting. The business accountant will then analyze and make any corrections that are needed. The work the bookkeeper provides is crucial to the work the accountant completes. Reach out to a professional for more information about business accounting or bookkeeping.