Bookkeeping is almost always associated with accounting. These two concepts go hand in hand and may be hard to distinguish from each other. But they serve the same purpose, which is to support businesses and business owners in maintaining their financial cycles.
If you're an accountant, a freelancer, or a business owner, then you might already be familiar with accounting and bookkeeping. You’re likely aware that these two processes require a certain extent of knowledge and experience to be conducted properly.
In this article, we'll be discussing how accounting and bookkeeping differ from each other and the available choices for accounting and bookkeeping software. Excited to learn? Read more!
Bookkeeping and Accounting: Their Differences
Bookkeeping and accounting are both extremely important for businesses to keep watch on their financial well-being in order to thrive and grow. For most people, these two processes might seem the same, but the truth is these two are different, with different functions and clear distinctions.
Bookkeeping is all about keeping records, recording daily transactions, and noting down all the sales and purchases the business takes part in. On the other hand, accounting is about having an overall look at the financial data of the business and interpreting that data to create sound decisions, such as acquiring business loans and expanding the business.
In simpler terms, the first step is recording all financial transactions (bookkeeping), and the next step is taking the data to view an overall picture of the business’s financial state (accounting).
Bookkeepers tend to focus on keeping things organized financially while being accurate in recording business transactions.
Meanwhile, accountants are more focused on the accounting processes of the business’s financial data and giving their understanding and analysis of the financial status of a business. They provide consultations and are tasked to give out advice regarding financial decisions in business operations.
Note that accountants can perform bookkeeping, but bookkeepers cannot be accountants unless they pass certain certifications. But these two roles still perform having one goal in mind, and that is to contribute to the business’s stable financial health in the long run.
Bookkeeping and Accounting Services for Small Businesses
There are a lot of bookkeeping and accounting services that can be of help to small businesses in carefully managing their financial data and recording financial transactions.
While it is truly admirable that some entrepreneurs are driven and dedicated to even figuring out how to do bookkeeping and accounting for their business, making it manageable by using the help of many existing accounting software programs and services may still be the wisest choice.
Outsourcing bookkeeping and accounting services can also improve the accuracy of their financial records and data.
Some of the bookkeeping and accounting services for small businesses include the preparation of financial statements, bookkeeping, tax accounting, and bank reconciliation. See more below.
Preparation of Financial Statements
These include income statements, cash flow statements, and the balance sheets of a business, which a lot of micro-business owners tend to overlook. However, these statements are important documents that contain financial data. These are crucial records that can forecast the future performance of the business.
Accounting professionals not only create these documents but can also assist business owners in understanding them so that they can make better decisions for their businesses.
Bookkeeping
This service is about having direct records of a business, including its day-to-day transactions, business purchases, and sales. To run a successful business, recording daily transactions is vital for the financial data to be current and accurate.
Tax Accounting Services
There are a lot of rules of tax reporting that businesses need to comply with, such as payroll tax, income tax, and the deadlines for the submission of these taxes. Aside from outsourcing this service, there are a variety of software that are available to help businesses save time and do the job correctly.
Bank Reconciliation
This pertains to the process of reconciling your bank transactions with your business's books. This accounting process helps business owners ensure that all bank-related transactions are being noted and recorded. It also aims to give a heads-up to the business owner when there is fraudulent activity.
Best Accounting and Bookkeeping Software for Accountants
When starting a business, it is ideal to look for affordable accounting and bookkeeping software that have easy-to-use features and can get the job done effectively. These software may vary according to their uses and features. That's why it is important for you to choose the one most suited to your business’s practices and needs.
Intuit QuickBooks Online
This software is best for small businesses because it is affordable and, at the same time, effective. One of the best things about QuickBooks is the tools it gives you to do different accounting tasks such as creating professional invoices, taking payments, keeping tabs on expenses, and monitoring your cash flow.
Aside from these, what makes QuickBooks attractive is its scalability. You can adjust your plan according to the size of your business and your needs. It is recommended for small businesses that wish to expand later on.
Oracle NetSuite Accounting Software
Another great choice of accounting software for small business owners is NetSuite because of the variety of features it offers, which includes enterprise resource planning tools. Its automation aspects make it simple for businesses to collect and send invoices and also get a clear picture of how they are doing financially.
FreshBooks Accounting Software
FreshBooks is one of the best choices for those who still can't afford expensive plans. Despite its affordable price, this software is an all-in-one accounting solution that can provide essential bookkeeping services for your business.
FreshBooks also boasts easy-to-use features, which benefit those who don't have a background in accounting. This is the software we recommend for freelancers and new business owners.
Zoho Books Accounting Software
This simple accounting software is best for microbusinesses with its basic features and affordability, allowing businesses to grow without having to spend big on accounting software programs. Its basic features include tax services and generating financial reports.
GoDaddy Online Bookkeeping
This online bookkeeping software is best for small businesses managing sales both offline and online. It is a great choice of software for online merchants, as it generates real-time reports. Not to mention, it offers a very low price for its most basic plan.
Learn, Partner, and Grow With Unloop
Accounting and bookkeeping play a big role in a business's success. Every enterprise, business, or job you'll see involves accounting to accurately track and handle finances. It is inevitable, especially in the world we're living in today.If you're someone trying to learn how to manage your business’s finances, whether you're a freelancer or a new business owner, then you're on the right path. However, learning this won’t be easy. Instead, partner with Unloop and get assistance from accounting professionals to unleash your full potential. Learn from our experts, and watch your business thrive. Don't hesitate to book a call with us today!