When we think of business finances, we tend to think of large rooms of people hacking away at their computers, reading financial reports, and assessing the growth of the company.
Though that can be true in some cases, do you know exactly what methods are being used? What about the tools, analysis, and procedures?
Some may say it’s bookkeeping, others may add it’s actually accounting that handles all of a business finances; and they’d be right. Both bookkeeping and accounting are an integral part of the success of a business, however their roles differ.
Here’s our guide to establish the key roles bookkeeping and accounting have.
Bookkeeping is responsible for tracking and recording all financial transaction. Some of their more important duties include the following:
- Recording financial transactions
- Tracking accounts payable
- Posting debits and credits to general ledger
- Regular maintenance and balancing of general and subsidiary ledgers
- Creating invoices
- Completing payroll
As you may notice, each duty revolves are the flow of money. Wherever it goes, whether it’s coming in or going out, is detailed thoroughly by bookkeeping. Without this service, a business could easily lose track of their progression.
Accounting can be seen as an entire entity; a service that entails every aspect of business finances including the bookkeeping process. It looks to interpret and define financial data to make clear and meaningful assessment of financial data
Accounting duties include the following:
- Generating financial statements
- Analyzing financial reports
- Preparing adjusting journal entries
- Creating budgets
- Building forecast models
- Handling all tax reports (i.e. filing tax returns)
Though their duties may overlap, it’s important to consider each position as a subset. Bookkeeping is simply a process that tracks all financial information, while accounting interprets all financial information including bookkeeping. It’s a subset to a much larger system in place.
Within both bookkeeping and accounting exist crucial roles team members must oblige to. These include a controller and a chief financial officer known as a CFO
A controller is someone who is in charge of the accounting system. They make sure that everything runs like clockwork and is making sure that each procedure is up to par with the GAAP. Each financial report must be seen and reviewed by the controller and then sent of to the organization.
A chief financial officer have a more “big picture” role, as they focus their efforts on the company as a whole and the direction the company should take based off of the financial information provided by the accounting system.
Though both play a massively important role within a business, a controller always responds to the CFO in any case.
It’s not uncommon for businesses to outsource their financial systems and may actually provide benefits for a company.
Keeping costs and overhead low is a great way to ensure money is being saved and growth can flourish, so outsourcing to a reputable company can be a wise decision, avoiding the expenditures of maintaining an in-house accounting team without sacrificing the efficiency.
Whether you’re a budding business or a massive conglomerate, both need the intel and diligence of an accounting team. Understanding what your accounting department can do is important to the success of your business, ensuring that areas such as bookkeeping are pivotal to accounting and will make your business flow very smoothly.
Are you looking to improve your accounting department? Then there’s no need to worry. With our specialized features, we make it easy for you to post an ad and find the perfect accounting team member for your business.
- Dallas Accounting Jobs Team