Many of us misunderstand that bookkeeping is the same as accounting or use the terms interchangeably, however, the financial management of these companies has two different functions. Melbourne companies hire different professionals for these roles due to their specific responsibilities.
The main similarity between the two job responsibilities is that they are part of financial management. However, the work associated with each person is different. While bookkeeping ensures accurate and error-free records. Accounting involves the analysis and interpretation of data to provide financial advice to business owners.
They have specific roles and responsibilities in the organization. There are some important differences between them. Below is a list of differentiating factors that will help you quickly determine what is important to your business.
What is bookkeeping?
A bookkeeper is responsible for recording all transactions in a business. These lists are arranged chronologically and are regularly updated to keep the books up-to-date and accurate.
The bookkeeper continuously maintains records of accounts receivable and accounts payable. They account for the amount owed to Melbourne suppliers and customers for billed products.
Thus, bookkeeping is an important step start in bookkeeping. Thus, the accountant’s work depends on the information provided and prepared by the bookkeepers.
What is accounting?
Accountants are involved in using financial information recorded and compiled by bookkeepers to conclude. They compile reports and reports that provide insight into the financial health of companies.
In addition to the income statement, the cash flow statement and balance sheet are also included. It helps business owners to understand the vast amount of information that an experienced bookkeeper in Melbourne collects and avoid pitfalls. An accountant’s job begins when a bookkeeper’s job ends.
Bookkeeping and accounting are two different things, what makes them different?
Let’s take a look at the factors that make it stand out when running a small business in Melbourne.
1. Tasks and Activities
Bookkeeper records and categorizes daily incomings and outgoings. They send invoices to customers and make scheduled payments to suppliers. Reconcile bank statements and ensure that payroll is paid through Payroll Management. They are responsible for continuously managing the required stock levels.
Accountants are responsible for updating transactions and estimating expenses. They help Melbourne entrepreneurs make informed financial decisions based on their estimates and reports. They study budgets and make forecasts and cash flow forecasts. Conduct audits and tax returns with effective planning and compliance.
2. Skills required.
Bookkeepers must complete a Certified Professional Education and Training (VET) program in Melbourne to qualify for this role. The most popular bookkeeping courses are Certificate IV in Accounting and Bookkeeping or Diploma in Accounting. If they wish to provide BAS Agent Services in Australia to their clients, they must register as BAS agents and obtain professional liability insurance.
Accountants must have a bachelor’s degree in accounting. Accountants working for international organizations must be Certified Public Accountants (CA) or Certified Public Accountants (CPA).
Those who want to be highly educated in the industry can get a master’s degree in accounting, so accountants need to know more than bookkeepers in Melbourne because of their analysis and evaluation.
3. Solution
The records created by the bookkeeper do not contain enough information to support decision-making.
Financial statements prepared by an accountant contain a lot of information about the profits and income of a business. Help Melbourne business owners better make quick decisions.
4. Objectives
The purpose of bookkeeping is to keep accurate and up-to-date records. On the other hand, the purpose of accounting is to determine the financial condition of a business and to advise entrepreneurs.
5. Results
Bookkeeping is necessary to provide information for accounting. Accounting results ensure the financial stability of Melbourne companies through effective planning, spending, and investment.
6. Operation
The methods used in bookkeeping are predetermined and based on accounting standards, on the other hand, accounting is concerned with analysis and interpretation. What can an accountant do anyway?
Result
Bookkeeping is an important function that ensures that all transactions are systematically recorded for audit. Accountants oversee the results of a bookkeeper to develop financial strategies that help businesses grow and avoid financial problems. They must work together as a team for the success of the business.
Thus, every organization needs both, however, many small businesses in Melbourne hire bookkeepers as bookkeepers to save money. Applies to small organizations but large organizations require individual experts to carry out their tasks.
Read Other: Single-Touch Payroll Is Changing, Let’s Help Make It Easier