While at it, we will also make our way to find out points which set them apart from one another.īookkeeping can be defined as a process of recording everyday financial transactions of an organisation. That being said, let’s now move on to find out what exactly is booking and accounting and their purpose. Though it may appear to be the same for some individuals, both practices follow a different set of rules and benefit an organisation in different ways. On that note, both bookkeeping and accountancy are vital for a business firm and play an important role in financial management. This helps in implementing proper measures to increase the revenue generation and better profit of the company or business. Separately appointing a bookkeeper and an accountant is also necessary in big companies to get a better and clear insight about the financial condition of a company or business. They both are in fact interdependent on each other. Accounting is related to bookkeeping in the fact that they both are related to reporting of financial transactions but accounting has the capability of giving a whole idea about the financial health of the business or company whose book keeping has been done. This is also essential for tax audit at the end of the financial year. This updated record of transactions gives a clear idea about the performance and progress of a company or business and can determine the future plan of action for improvement. This helps to plan your future financial transactions accordingly. Regular updates of financial transitions taking place in a business, company or even household is quite essential to keep an idea about the expenses, loss and profits on a day-to-day basis. Bookkeeping is an essential part of all financial transactions.
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