Are Bookkeeping and Accounting the Same Thing?

Owners-Bookkeeping Outsourcing
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Bookkeeping and Accounting

Many small businesses, medium size businesses and corporations think that they are operating the same business as bigger businesses. While this is not entirely true, accounting and bookkeeping do generally follow the same path. The accounting departments file their yearly tax returns, and business owners to send them in to their accountant. The accountant then compiles the year’s income statement, balance sheet and statement of cash flows and decides how to make his/her quarterly or annual reports to the business owners. This is the general sequence of events that is repeated throughout most UK businesses’ tax years.

Bookkeeping and Accounting

Many UK Accounting Firms

There are benefits to operating in the same structure as larger businesses though. For instance, many UK accounting firms offer lower rates to new clients than larger firms. Smaller firms also tend to offer personal services such as in house call center services and Internet access rather than outsourcing those areas to larger business accounting firms. In addition, many UK business accounting firms will provide their clientele with training on how to use certain software programs that are specific to their clientele. All of these things can add up to savings for business owners throughout their tax year.

Accountants That Perform Their Job 

Now that we know what all accounting firms do, how are bookkeeping and accounting the same thing? When you pay an accounting firm for their services, they are providing an investment in your company’s future. The accountants that perform their job are experts in the field of finance and the accounting world. They are very skilled at ensuring that your financial records are accurate and up to date.

As stated before, bookkeepers are responsible for the recording and tracking of financial transactions. Most businesses use bookkeepers to keep track of the various financial elements of the company including inventory, sales, and payroll. Bookkeepers are responsible for collecting fees and expenses and creating reports. A bookkeeper is needed for a business to remain compliant with the law and must be properly trained in order to effectively conduct his or her job. While some small business accounting firms offer their clients a freelancer-style approach to accounting, most prefer to maintain full-time employee positions.

Bookkeeping and Accounting

Individual Responsible For Accounting

What about when a company does not have a single individual responsible for accounting? There are several options available for businesses that need assistance with their bookkeeping. Businesses can hire separate bookkeeping professionals to handle their financial records. These professionals will typically belong to a smaller firm and will be based in an area separate from the accounting department. This option tends to be more expensive, but if a company cannot afford to hire a full-time bookkeeper or accountant, they may want to consider outsourcing their bookkeeping needs.

Solutions For Small Businesses 

Some small businesses may find it helpful to contract with an accounting firm to handle their accounting needs. Accounting firms offer several different solutions for small businesses including payroll and benefits, sales and marketing, tax preparation, and employee benefit administration. Small businesses that need help with their accounting can find great value by contracting with these types of accounting firms. In most cases, accountants from these types of firms will be members of the Business Exchange Staffing Institute (BESI). This organization offers many courses and resources for accountants of all levels, from beginners to industry veterans, and is known for its commitment to accounting professionals.

Bookkeeping and Accounting

Owners-Bookkeeping Outsourcing

The Internet has created a new opening for small business owners-bookkeeping outsourcing. Small companies are able to outsource daily office duties, such as bookkeeping and accounting, to accounting firms that are located around the world. These accounting firms are capable of managing projects of any size, including those that involve several countries or departments. Outsourcing allows a company to focus on what they do best, which is making products and services available to customers. This allows them to expand their business without having to expand their knowledge of accounting, budgeting, and other bookkeeping related tasks.

Accounting Is Just A Part Of Every Business

There are some companies that believe that bookkeeping and accounting are separate tasks. However, the reality is that they are not. Bookkeeping firms are typically outsourced throughout the world, which allows them to manage global projects while maintaining close ties with their local clients. While it may seem like accounting is just a part of every business, this is far from the truth.

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