Bookkeeping vs. Accounting: Role in business and outsourcing

Businesses do not operate without accounting. However, some of the tasks, like primary input data for accounting, are performed by bookkeepers. This share of work can actually be delegated to Virtual Assistant and BPO companies. Let’s delve into the difference between the roles of bookkeeping and accounting that are pivotal for business owners. While both involve financial record-keeping, their roles differ significantly, especially as businesses grow and financial processes become more complex.

Role of Bookkeeping

Obviously, bookkeeping lays the foundation for financial management by recording transactions such as purchases, receipts, invoices, and payments. Bookkeepers use single-entry systems for tracking income and expenses or double-entry systems to manage assets, liabilities, and overall financial health. Their meticulous work ensures financial accuracy and prepares businesses for further analysis.

Role of Accounting

Instead, accounting builds on bookkeeping by analyzing and interpreting financial data to assess business performance. Accountants provide valuable insights into profitability, financial stability, and compliance with tax regulations. They prepare critical documents, such as financial statements and tax reports, helping businesses make informed strategic decisions.

Here is the table the table that will help you understand their roles:

Invoices and payment processing as well as verifying bank statements are the most time-consuming tasks. Accountancy services are expensive, that is why companies are trying to outsource those services. The solution is obvious – delegate to VAfromEurope and get extra benefits for your business. Here is more (https://vafromeurope.com/2019/10/18/our-clients-requests-invoice-processing/). In terms of qualifications, bookkeepers require organizational skills and attention to detail but typically do not need formal certifications, which makes their services cheaper. They focus on recording daily transactions flow and keeping up-to-date ledgers. Bookkeepers are also excellent at entering data and accuracy.

On the other hand, accountants must have a degree in accounting or finance and often hold certifications such as CPA for advanced roles. They analyze, identify trends, and strategize. They need mathematical expertise, problem-solving abilities, and a sharp analytical mindset to identify and resolve discrepancies.

By leveraging the strengths of both bookkeepers and accountants, businesses can ensure their financial processes remain efficient and future-ready.

What is the best option to hire?

Small businesses may start by managing finances independently but often benefit from hiring a bookkeeper to handle daily records. What’s more, bookkeepers are generally more cost-effective, handling routine tasks. As the business grows, the number of invoices and the amount of other financial data grows exponentially, one Virtual Assistant is now enough. That is why bringing more assistants from a trusted Agency would be an option.

VAfromEurope has a well-established procedure and structure for hiring employees and building teams with the right technical and security support.

We are here to help you.