When we hear the term “accounting” at first, it might not be clear what it is. That’s because there are many different types of accounting out there. Accounting services can help you track your income and expenses, manage taxes, prepare for audits, and more. In this article, find out what the difference between accounting and bookkeeping is and how they both contribute to your business success.
What Is Accounting?
Accounting is a system of gathering, analyzing, and reporting information about economic activities to provide useful information for decision making and management. Bookkeeping is the process of recording financial transactions such as sales, purchases, receipts and payments.
The Difference Between Bookkeeping and Accounting
In accounting, the terms “assets” and “liabilities” refer to the different sides of a firm’s balance sheet. Assets are things that have value and can be used to generate cash flow. Liabilities, on the other hand, are things owed by firms that must be paid back with money. In bookkeeping, assets may also be referred to as “books.”
Person Responsible for Maintaining Books of Accounts
- Managing Director,
- Whole-Time Director, in charge of finance
- Chief Financial Officer (CFO)
- Any other person of a company authorized by the Board.
An accounting standard is a collection of rules, norms, and procedures that govern the firm’s systematic bookkeeping and other accounting operations throughout the year. The Accounting Standards Board (ASB) is a body within the Institute of Chartered Accountants of India (ICAI) that comprises of members from government departments, academics, other professional groups, and so on. The National Financial Reporting Authority (NFRA) recommends these accounting standard formulations to the Ministry of Corporate Affairs (MCA)
Which One is Right for You?
Bookkeeping is a more common term and is defined as the process of recording financial transactions in order to make sense of the company’s operation. In contrast, accounting is the process of preparing an annual or business registration period report for a set of customers, government agencies, banks, shareholders, etc. One might be best for your specific needs and the other could work well for you if you have a lot of transactions taking place daily.
One of the most common ways a business pays for goods and services is through an accounting firm. An accounting firm will take care of the financial side of a business. They’ll prepare payroll and tax returns, manage bank accounts, and more. A bookkeeper’s responsibilities are to track all transactions that happen with the company registration and make sure they’re documented properly.
In general, accounting is the process of tracking, recording, and reporting financial information about a company or entity. This can be done for any business entity which is usually a local or national legal person or body. Bookkeeping is the process of managing records of transactions taking place in a business to ensure that all the data are properly recorded and maintained. The services offered to businesses in India by Taxzona consultants include accounting, bookkeeping and tax services.
Assisting business owners with their financial records of the company through regular reporting and audits is one aspect of our services. Other services include preparing financial statements, audit/tax compliance procedures, or risk management as well as managing capital projects, small business loans etc. We also provide back-office support for specific projects that involves multiple teams like HR, payroll and procurement and so on.