Factor Separating Bookkeeping From Accounting

Bookkeeping might sound like a difficult concept to some people. If you are one of them, it is best not to take matters into your own hands and hire professional bookkeeping services in Houston. Now, it is okay not to be able to do the bookkeeping yourself, but it is essential to understand how bookkeeping is different from accounting, at the least. Let us discuss a few of the significant differences between the two concepts.

1. By Definition

If you ask Houston bookkeepers, they’ll tell you bookkeeping refers to the concept of identification of financial transactions and keeping a record of the same.

Accounting, on the other hand, is the concept that deals with summarizing and interpreting the complete financial data (essentially of a corporation).

Accounting is, simply speaking, a small part of the vast galaxy that bookkeeping is.

2. On Decision- Making

While there are several bookkeeping services in Houston, an important aspect to keep in mind is that bookkeepers’ information cannot base effective decisions.

However, in accounting, critical management and financial decisions find their basis in the accountants’ reports and findings.

3. Financial Statements

The information you might gather from Houston bookkeepers cannot be made into financial statements. Bookkeeping, in fact, does not deal with any aspect of such statements, neither the making nor the analysis.

Accounting primarily deals with financial statements and report making, which form a vital part of the entire process.

4. Financial Analysis

Reiterating, professional bookkeeping services in Houston do not deal in the preparation and analysis of financial reports, whereas accounting has deep roots in economic analysis. So much so, business deals are made and broken based on financial insights gathered through these analyses.

5. Financial Position

Financial position is the level at which the organization or individual stands. Are they richer than before, or have they spent too much this fiscal year? Accounting has answers to these and other similar questions.

On the other hand, Houston bookkeepers do not step anywhere near positioning or determining other similar factors.

6. The Types

Accounting can be done in several ways, depending upon the data that has to be accounted for; bookkeeping services in Houston deal with two types of data entry/ bookkeeping, i.e., single and double entries.