Anyone in business no doubt sees these terms on a regular basis: bookkeeping and accounting. The terms are so ubiquitous, in fact, many people might just gloss over them, secure in the knowledge that they have something to do with recording how much money comes into and goes out of a business. And yes, that is true. These terms do, in fact, have something to do with expenses and incomes. Yet, exactly what do they mean? And how do they differ? Knowing these answers is vital for every business owner.

A CPA in Tampa from Reliance Consulting, LLC, can explain in the simplest terms what bookkeeping and accounting mean – and why the difference is important to you. Here are the simple definitions for the two related, yet different terms:

• Accounting – a system of recording, reporting, and analyzing financial transactions, usually for a business. The person in charge of accounting is typically an accountant, or certified public accountant (CPA), who follows the rules and regulations laid out by the General Accepted Accounting Principles.
• Bookkeeping – the recording of the financial transactions of a business. This is usually done either in the single entry or double entry method.

In short, accounting is the “big picture” overview of a company’s finances, the strategy for keeping up with transactions. Bookkeeping is the detail, the actual recording of transactions for later analysis. It may involve the recording of sales, cash or goods drawings, purchases, returns of purchased or sold items, trade discounts, cash discounts, sales commissions, etc. It basically is a record of all liabilities and assets, plugged into the accounting system to provide data for analysis. Whether you need accounting help or bookkeeping help, or both, let an experienced, knowledgeable CPA from Reliance Consulting be your partner. Contact us today, and we will gladly perform a free financial health checkup for your company or individual finances.