Bookkeeping Vs. Accounting

Difference Between Bookkeeping and accounting

Although sometimes tend to confuse, bookkeeping is not the same as accounting .But bookkeeping can be considered as a part of accounting.
It is understood as the record operations in the accounting books. The process of taking the existing values in the brackets that support the accounting performance of economic facts and entering them in the different ledgers as a proof of accounting, the newspaper columnar, balances and ledgers. [Proof of accounting or newspaper is not a ledger rather it is a document for summarizing a series of operations and then transferred to the books].
Accounting is a much broader concept which carries additional bookkeeping, analysis and interpretation of information supplied by the books and financial statements, information that is possible to be generated through the art of keeping books, for it is the record of economic events.
With the advent of software for accounting, bookkeeping has become obsolete, since the system is responsible for delivering the complete thing which is ready to be interpreted and analyzed.
As accounting is a tool for analysis and interpretation of information of the company, it has started to become more and more important to senior management level, as is the accounting a basis on which economic decisions are taken by management and financial people.
The real added value of accounting and the accountant is precisely the diagnosis that is presented to the company from its financial and economic reality, projections and trends can be identified based on that reality. The possibility offered to identify gaps and opportunities and formulating strategies for one such situation to another.
Accounting tells the company and has been telling , as it is telling now and it will keep on telling , and to have this knowledge is not enough to have a box of printed books, but these values should be interpreted in accordance with the reality of the medium, which also implies that the accounting must be supported by other branches of economics, to achieve their goal which must have become a management tool for business [there is the name of Gerencie.com].
You can not make decisions without knowing the sales and behavior of costs of production or marketing, without knowing the profile and behavior of customers and suppliers, without knowing their own employees, and all that can be extracted from accounting.
If you do not know the profit margin and the level of resource consumption of each area of the company and its each and every product, you cannot decide for what kind of strategies to follow, or you cannot define where to expand, where to start and where to stop producing and so on. All this is possible with the help of accounting. A CPA can read, interpret and analyze what the books and financial statements say.

Category: VS  |  Tags: