Bookkeeping and accounting are two terms that are often found in accounting. There are still many who think that accounting and bookkeeping are two things in common. Actually the two terms have different meanings and functions but are still interrelated.
If you are a professional in accounting or are studying and want to develop your skills and knowledge at the midwife, this article helps you to understand what distinguishes accounting books and records in principle and function.
Definition of Accounting Bookkeeping and Recording
Accounting can be said as a regular translation of data about financial transactions in the form of reports and providing certainty about financial information that will help managers, investors, tax authorities and other decision makers to make the allocation of decision resources within companies, non-profit organizations, and government agencies. The result is a better understanding of actual profitability, and awareness of cash flow in the business.
While bookkeeping ( book-keeping ) is the process of organizing, classifying, summary and reporting accounting elements such as profit, loss, cash flow, in a neat and orderly to the transaction data that has been recorded.
So it can be concluded that bookkeeping is indeed part of accounting, but has different principles. If accounting activities will produce a financial report or special report and require professional staff in the field of accounting because it requires an analysis, while accounting will only produce documentation for internal purposes only.
A person who works to compile books is called a book-keeper , while people who work to record and make accounting reports are called accountants.
Book-keeper and Accountant Work Qualifications
Bookkeepers or book-keeper who is responsible for writing daily business transactions at least have a diploma in accounting. A book holder is required to be accurate in presenting data, because the ledger contains detailed information about the transaction per day. A bookkeeper must also have knowledge of the main financial topics. While working, they will be monitored by accountants or business owners whose books are being processed.
For qualifications, an accountant has at least obtained a bachelor’s degree. Accountants should also obtain additional professional certification by taking the Public Accountant Certification Exam (USAP). An accountant is generally able to do a broad enough task even to conduct audits, review reports, and represent clients before the IRS. They are required to be meticulous, measured, skeptical, logical, consistent, disciplined and compliant with applicable ethics.
Work Scope
The scope of work of an accountant with a book-keeper is also different. The following are the duties and scope of work of a person who compiles bookkeeping and accounting records
Bookkeeping
The scope of bookkeeping work includes;
- Arrange, classify, process and also record employee payroll
- Issue and record sales invoices
- Record changes in company inventory
- Record petty cash receipts and transactions
- Make payment for purchases
Accounting
Meanwhile, activities in accounting include making a list of accounts, preparing ledgers, designing financial reports, publishing management reports that are tailored to specific issues, making budgets and comparing them with actual results, and making tax reports and so forth.
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Analysis
A bookkeeper is not required to have too many skills , because the bookkeeping process is only in recording without requiring any analysis. While an accountant must have qualified skills to be able to analyze and interpret the information in the ledger into a report.
Although there are differences between the two, in practice all of these things can be blurred. This is because bookkeeping and accounting are related and both can collaborate. Organized and balanced financial records produced by bookkeepers, coupled with smart financial strategies and accurate tax filing by accountants, contribute directly to the long-term success of any business.
Technological advances that result in automation in various processes of corporate financial management also play an active role in blurring these differences. Automation has freed bookkeepers from repetitive and monotonous tasks. This allows them to improve their skills and take on more complex tasks.
