Negative cash flow is a major contributor to a majority of failing businesses. However, cash flow problems do not necessarily mean that a business is not profitable. They often arise due to inadequacies in balancing the inflow and outflow of money, ensuring that the business has enough cash for key activities at any given point. Good bookkeeping and accounting practices are the best way to track the flow of cash and monitor your business’s performance. Although accounting and bookkeeping are often used interchangeably, they have different meanings, and if you’re going to outsource these services, you need to be clear on the definition of each so that you can find the right person for the job. What Is Bookkeeping? Bookkeeping and accounting are two important functions for any organization. Though they are related, hence the confusion around them, they’re two separate functions. By definition, bookkeeping is the process of recording financial transactions. With TheOfficeSquad, you can outsource your bookkeeping services so that your in-house team can focus on driving your business forward. Our bookkeeping services include:
- Ensuring you are compliant with regulations
- Simplifying the process of filing taxes
- Reducing risk of embezzlement
What Is Accounting?
In essence, recording financial transactions is part of the accounting process. However, unlike bookkeeping, accounting also involves classifying, interpreting, analyzing, summarizing, and reporting financial data. Benefits of TheOfficeSquad’s accounting process include:
- Allowing businesses to prepare accurate budgets
- Providing insights that assist in decision-making
- Helping monitor the financial health of the business
Key Differences Between Bookkeeping & Accounting
- Objective The main purpose of bookkeeping is to ensure that the records for all financial transactions are properly and systematically kept. With accounting, the objective is to assess the financial position of the business, then draw insight that will assist in strategy and planning.
- Financial Statements The accounting process involves the preparation of financial statements, such as balance sheets, statements of retained earnings and cash flow statements. Each of these financial statements provides unique insights into the business. This is different from the bookkeeping process as bookkeeping only involves maintaining records of financial transactions.
- Analysis The bookkeeping process is complete once records of transactions are kept. However, with the accounting process, preparing financial statements is only the first part. Accountants also have to analyze, interpret and report their findings from the financial statements.
How Can Bookkeeping and Accounting Benefit Your Business?
Bookkeeping and accounting are essential for the sustainable growth of any business, whether it’s small or a multinational organization. Large corporations have the resources to hire personnel to handle their accounting needs in-house. For small businesses and most startups, this is not an option and many new business owners lack sufficient financial knowledge. Fortunately, there are firms that assist businesses with their bookkeeping and accounting needs.
Outsource Your Bookkeeping & Accounting Services to TheOfficeSquad
Are you having trouble keeping track of your finances? TheOfficeSquad specializes in outsourced bookkeeping services for small businesses. Get in touch with us today at 702-649-3495 to safeguard the future of your business.