A company normally makes a lot of financial transactions and business activities in a given period, say, a day or even a year. Because of the large number of transactions and activities a company makes, it needs to keep track its flow of money. Once the flow is tracked and recorded, the company then analyzes the results. These results will be the basis of making the company's financial statements. Not all bookkeepers are properly trained to interpret these statements, which is why you should always hire a bookkeeper with an accounting degree.
To handle this responsibility, a company needs to outsource an individual or a team that specializes in bookkeeping with a strong accounting background. These people are privy to the company's financial secrets. Without them, companies would probably be crippled. Most people think that bookkeeping and accounting is the same thing. Well, they are not but both are related, just like sales and marketing.
What makes bookkeeping and accounting different is that bookkeeping is the process of recording, classifying, tracking and monitoring financial transactions. Quite simply, bookkeeping is all about maintaining a company's financial transactions. These financial transactions include purchasing, loans, mortgages, and any other activity that involves money. In bookkeeping, the goal is to record and summarize these financial transactions and arranges them into a usable form.
Bookkeeping just a component of accounting. In an analogy, accounting is a tree while bookkeeping is one of its branches. Accounting, on the other hand, involves analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information. The information used by the accounting staff comes from the data provided to them from the bookkeepers. When you have a team of bookkeepers with accounting degrees, the communication becomes seamless, saving you time, money, and headaches trying to deal with a bookkeeper who doesn't fully grasp the bigger picture.
Cloud based accounting systems such as QuickBooks online, have helped accounting and bookkeeping a lot. Although some companies still opt for the manual method (if you know of one who does, tell them to call us asap!), the benefits of using a virtual system for accounting and bookkeeping far outweigh the cost of the software and handing over your bookkeeping tasks to a pro. Through virtual means, accountants and bookkeepers can track, record, maintain, and analyze financial records and summaries in a faster, more accurate, and more efficient way.
Most companies today opt for automated accounting and bookkeeping systems. As its name implies, the program allows all parties involved to automatically update the records. Apps that integrate with the software make maintaining proper records a breeze. This saves business owners precious time and effort and reduces the chances of inaccuracy.
When you outsource your bookkeeping a team that truly understands the complex world of accounting, you can be rest assured your financials are in good hands.
Does your bookkeeper have a degree in accounting? If not, it may be time to re-evaluate if you discover things that don't quite add up. All of The Bean Counters bookkeepers have accounting degrees. Give us a call at 912-376-9918 today, if you'd like to see how we can help save your company time and money.