Most people who start up their own businesses often mistake accounting for bookkeeping and vise versa. The both are different and play important roles in ensuring the smooth running of your business. Bookkeeping is basically about putting all your daily, weekly and monthly operations down in record. This record is called bookkeeping and is done to keep track of what you spend, goods and services acquired, your profit and also losses.
When bookkeeping is properly done, running your business becomes much more efficient and can help you draw out future projections and plans. Also, bookkeeping is very important when it comes to drawing out your taxes. While some may argue that bookkeeping may be nothing more than a time waster to small businesses, it is in reality much more than that and could help make or break your business. Some of the basic bookkeeping tools you will need include cash books, inventories, profit & loss accounts, cash payment vouchers and sales invoices. Efficient bookkeeping will help you compare your present financial status to previous years which is important for all businesses when it comes to analysing growth rates.
Accounting is meanwhile distinguished from bookkeeping and involves the setting up of and maintaining records. Accounting is much more detailed and keeps one informed of how far they have gone financially and where the company is heading. Accounting involves more than merely managing credits and debits and among others, helps you closely monitor your accounts; establish a detailed budget and better understand your financial position. This will help you identify problematic areas and get them ironed out soonest. Here, at 3E Accounting, we clearly acknowledge the importance of bookkeeping and accounting and provide you will affordable, professional services to help you make your business grow. Remember, proper bookkeeping and accounting will help pave the way for your business to achieve greater heights.