What is the difference between the accountabnt and the bookkeeper?
A bookkeeper is a person to keep your books in order. You give this person all invoices and payments and they enter necessary info into a book. Basically your bookkeeper keeps your books and other issues (like IR assessments, financial legal associations, etc.) is beyond this job.
The crucial difference between the bookkeeper and the accountant is that the accountant also has the duty to track if your finances are within the framework of all necessary laws.
Now that you know the major difference, let’s get down to the basics skills that both a bookkeeper and an accountant must have.
Accounting is based on a simple fundamental concept: if one receives something, then another has to give. Due to this every transaction has debit and credit.
The study of accounting is built on the Accounting Equation and Double Entry Book Keeping.
The typical accounting equation is Assets = Liabilities + Equity
The double entry aspect of bookkeeping is about the fundamental issue that the perfect balancing of the accounting equation is guaranteed by this system.
Assets are your possessions, assets are also the possessions that others owe you. Liabilities are what YOU owe others.
The difference between assets and liabilities is called equity. It is also important to note that capital introduced is not refundable, due to this it is not a liability and can be called equity.
You can grasp the concept of double entry bookkeeping by thinking about the whole issue the following way – just think logically about who or what gives, and who or what receives in each transaction – and here it is, the double entry.
Now let’s talk a little about the modern assistants of the accountant and bookkeeper – web-based accounting systems, because usually they are less expensive and more efficient than traditional systems.
Basically for a small fee you can do accounting through the internet, view and analyze the reports and necessary people can access them when they need.
Using a web-based accounting system requires to have established network systems (Ethernet networking or virtual private network). Usually Ethernet networking is less expensive, but virtual private networks can be better for the companies with branches in different locations.
Before choosing the web-based accounting system, make sure to find out its guaranteed minimum downtime and check their client support. It should also have predefined charts and reports with nice level of customization. Pay special attentio to the system documentation, so that you can teach new staff how to use the system properly.
More tips about accounting and bookkeeping in other posts on the blog.
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