Bookkeeping

The key difference between bookkeeping and accounting is that the former involves recording financial transactions and organising data, while the latter is more about interpreting and presenting the data. A bookkeeper’s duties revolve around day-to-day tasks to ensure cashflow is managed. Accountants tend to look at the finances in a wider context, carrying out audits, creating forecasts and identifying growth opportunities

There are two types of bookkeeping and three types of accounting. The two types of bookkeeping are single-entry, which is a basic system that records one entry for each financial transaction, and double-entry, which isn’t cash based, but records two entries for each transaction that relate to debt and revenue.

The three types of accounting are cost, managerial and financial. Cost accounting looks at the cost of accomplishing a business goal, while managerial accounting is about organising financial data to inform business decisions. Financial accounting tracks, records and monitors all daily transactions, mapping them onto monthly, quarterly, and yearly statements.

It’s time to invest in bookkeeping services when the books start taking up more time than you can afford, or your bookkeeping consistently falls behind. Alternatively, if you have an unpredictable cash flow or find your business falling behind with tax returns and payments, it’s in your interest to outsource your bookkeeping.

Businesses, no matter how large or small, are legally required to keep records of all financial transactions, including sales, purchases and expenses. Record keeping is much simpler these days thanks to accounting software, but if you lack confidence or time to keep your records up to date, you’ll need to consider investing in bookkeeping services.

A bookkeeper can free up time so that you can spend it doing what you do best. They can manage your day-to-day finances, send invoices, perform bank reconciliation duties and more, ensuring your records are up-to-date and compliant with legislation.