Bookkeeping & Accounting

What is the Difference Between Bookkeeping and Accounting?

Bookkeeping and accounting are both essential business functions required for all businesses. It is important to understand that there are differences between the two. However, the biggest difference between accounting and bookkeeping is that accounting involves interpreting and analyzing data and bookkeeping does not.

Bookkeeping is responsible for recording, storing and retrieving of financial transactions. Bookkeeping ensures that records of individual financial transactions are correct, up-to-date and comprehensive. Each transaction, whether it is a question of purchase or sale, must be recorded. Accuracy is therefore vital to the process.

Accounting is a high-level process that uses financial information compiled by a bookkeeper or business owner, and produces financial representations using that information.

The process of accounting is more subjective than bookkeeping, which is largely transactional.
Accounting is comprised of:

• Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
• Preparing company financial statements
• Analyzing costs of operations
• Reconciliations to the general ledger
• Completing Income Tax Returns

The process of accounting provides reports that bring key financial indicators together. The result is a better understanding of actual profitability and an awareness of cash flow in the business. Accounting turns the information from the ledger into statements that reveal the bigger picture of the business, and the path the company is progressing on.

Unlike other companies, Green Dollar combines both of these services in one total package.

We’ll enter your transactions, reconcile your accounts and provide you with a set of financials at the end of the month. We will not let you walk out the door without having gone over the financials in detail with you. Our goal is to help you understand the financial health of your business.