Differences between Accounting and Bookkeeping
Bookkeeping: Recording and filing
Aimed at consistently keeping the business/company records of all financial transactions in order, proper, and organized, the administrative task of bookkeeping refers to the process of identifying, measuring, and recording financial transactions on a daily basis and in a consistent manner.
Considered as the first step in accounting, bookkeeping involves preparing the payroll, creating invoices, posting debits and credits, reconciling company credit cards, among others. The bookkeeper is responsible for updating inventories, handling petty cash, paying suppliers, and filing customers’ cash receipts.
Bookkeeping in Singapore also involves balancing the company’s ledgers, subsidiaries, and historical accounts where the sales and expenses are recorded along with other supporting documents.
Accounting: Analysing and reporting
With the main objective of gauging the business’s financial situation and further communicating the same information to relevant management authorities, the middle-level management task of accounting refers to the process of summarizing, analysing and interpreting, and reporting financial transactions that were classified in the ledger account.
With the preparation of financial statements involved in the accounting process, the role of the accountant includes accruing or deferring expenses and revenue, analysing and interpreting the company’s operational expenses, filing taxes and other regulatory payments, preparing financial statements and reports.
Business owners and relevant management personnel rely on these reports that largely influence financial decisions that they have to make to ensure the stability and growth of the business.
