The Difference Between Accounting and Bookkeeping

The advantage of hourly pay is you receive 1.5 times your average wage for hours worked more than 40 per week. In bookkeeping, extra hours are typical during the busy tax season of January accounting vs bookkeeping to mid-April. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

The additional education and qualifications required pays dividends through higher salaries, increased demand, and more advancement opportunities within the field of accounting. As you’re planning your budget for the following year, your accountant will be the one who can provide analysis and suggestions to ensure your company is in the best fiscal shape to succeed. And, of course, all companies need to file taxes, which can become extremely complicated as your business grows. A trusted accountant can help guide you through that process and help handle any audits that may arise.

How Can a Bookkeeper Become an Accountant?

If you are already a CPA, you can act as an enrolled agent without passing the exam. For a long-term career, accounting offers much more upward mobility and income potential. The education required to be competitive in the field is greater, but the payoff down the road can be considerably higher.

But they are distinct in the nature of their work, the frequency of their tasks, and the qualifications needed. Thus, in order to obtain bookkeeping certification, an accounting professional has to first pass a four-part public bookkeeping examination and must possess an appropriate bachelor’s degree in accounting. In the double-entry system of accounting, the business transactions are entered as debits and credits. These financial statements help lenders and investors to understand the financial position of your business before lending any amount of money. The Income Tax Department allows certain tax deductions, that is expenses that you can deduct from your taxable income in order to save on taxes.

Bookkeeping vs Accounting Differences

Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. To learn more about the basics of accounting and bookkeeping, read our Accounting 101 article. While bookkeepers don’t need a special license or certifications, bookkeeping accreditation and licensing are available.

• Bookkeepers focus more on the early stages, logging and categorizing transactions as they occur, and tracking account balances.
• Accruals will consist of taxes owed including sales tax owed and federal, state, social security, and Medicare tax on the employees which are generally paid quarterly.
• Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise.
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