The demand for San Diego bookkeeping services is higher than ever. This should come as no surprise since modern business owners are oriented toward their businesses and don’t want to waste time and get sidetracked by what they consider secondary functions. They are not willing to invest their time and effort in the painstaking process of managing their company’s financial records unless they absolutely have to. And why should they when they can leave all that to professionals who will do the job timely and accurately?
But what exactly is the difference between bookkeepers and accountants?
What is included in bookkeeping services?
Bookkeeping involves various tasks required to keep track of and record business transactions:
- sources of business revenue,
- gain, expense, and loss transactions.
Bookkeepers use the straightforward debit and credit system to record business transactions and make entries. A sound bookkeeping system is based on two key principles: that every debit amount must have an equal credit amount and that all accounts must balance. This makes the accounting process possible.
The bookkeeping process consists of the following:
1) analyzing financial transactions;
2) assigning financial transactions to specific accounts;
3) posting journal entries of debit and credit amounts in a chronological order based on invoices, sales receipts, purchase orders and other relevant documents;
4) posting entries to ledger accounts;
5) adjusting entries at the end of each accounting period.
What is the difference between a bookkeeper and an accountant?
It is important to note that although they have distinct duties and responsibilities, the differences between accountants and bookkeepers aren’t always clear-cut. The tasks they perform can be intertwined to an extent. The key difference between these two services does not necessarily concern what they do, but why they do it.
Accountants pick up where bookkeepers leave off. An accountant receives information from the bookkeeper and builds on that. Bookkeeping can be perceived as a starting point of the accounting process. Bookkeepers provide information by documenting financial transactions and relevant data and accountants process and analyze these transactions. Having accurate financial records is important because this tells business owners and managers whether the business is making or losing money, whether a change of direction is needed and how stable their business is.
The company management can also rely on accountants to provide them with strategies for improving company profitability and maximizing efficiency.
Can a bookkeeper become an accountant?
As stated above, the difference between bookkeeping and accounting is straightforward although the two services are closely connected. Bookkeepers who want to build a career in accountancy can do so as they already perform at least some basic financial accounting within their scope of bookkeeping services, especially if they work in smaller organizations. To become licensed CPAs, bookkeepers need to meet certain educational and professional requirements.
What is a CPA?
In order to become a Certified Public Accountant, one must pass the rigorous CPA exam. CPAs are also required a longstanding background and experience in accounting and finance. They can work as: auditors, accounting consultants, business advisers, tax consultants or decision makers.
CPAs can assume the following positions:
- Tax planning for individuals and businesses,
- Financial planning for individuals and businesses,
- Consulting services for individuals, businesses, non-profit organizations or government agencies,
- Forensic accounting, investigative or fraud accounting,
- International accounting for businesses in need of help with trade and regulations on a global scale,
- Environmental accounting to ensure compliance with environmental protection, regulations and conduct audits,
- Assurance services, typically combined with audit services,
- Information technology.
You run your business while we take care of the rest
Clients from across San Diego County who are in need of dependable San Diego bookkeeping services always seem to find their way to us, and we believe it is owing to our longstanding reputation, business history and successful track record. Why risk having technicalities sidetrack you into wasting valuable time and resources? Here at David York’s Tax Service, we value your time and money. We’ll do your taxes and take care of your bookkeeping and payroll, while you run your business. Call today to schedule your initial appointment and find out how we can help your business grow!