Bookkeeping Vs. Accounting

"You have to understand accounting and you have to understand the nuances of accounting. It's the language of business and it's an imperfect language, but unless you are willing to put in the effort to learn accounting - how to read and interpret financial statements - you really shouldn't select stocks yourself” - Warren Buffett

Bookkeepers handle the day-to-day tasks of recording financial transactions, while accountants provide insight and analysis of that data. It can be defined as the mechanical process of recording accounting information in the system.

Bookkeeping is the process of recording operations in the accounting books. It takes the existing accounting values that support the realisation of the economic facts and delivers them in the different accounting books.

Accounting is a much broader concept which entails, in addition to bookkeeping, the analysis and interpretation of the information provided by accounting books and financial statements. It is information that has been possible to generate thanks to the art of bookkeeping.

With the appearance of accounting software, bookkeeping has been limited to the registration of information in the application since the system is in charge of delivering the complete information ready to be interpreted and analysed.

Accounting involves examining bookkeeping transactions for accuracy and thus obtaining a complete financial picture.

As an entrepreneur, you trust your accountant to make recommendations on how to improve the financial health of your business and to help you comply with tax laws. It also enables you to understand the value of your business and which areas produce the most money.

Accountants are trained to search and find the weak areas in your business through patterns and inconsistencies in finances to develop strategies that help strengthen those areas.