What is accounting?

by JAMES BAILEY Accounting & Bookkeeping Services

Sometimes, the work of an accountant can overlap that of a bookkeeper. However, while the bookkeeper’s job is typically centered on transaction entry, the accountant’s is to research the knowledge recorded by the bookkeeper, using accounting principles.

Graphic of an accountant with a calculator

Accountants can tell you where your money is in the least times.

The top accounting functions performed by accountants include the following:

Preparing financial statements: While bookkeepers can run standard reports including financial statements, accountants typically run these reports, which include a record, an earnings report, and a income statement, alongside the other reports deemed necessary. It’s also the accountant’s job to research the knowledge within the financial statements, watching items like monthly expenses, monthly income totals, the quantity of money your business has available, and ways to enhance business performance.

Analyzing revenue and costs: Bookkeepers enter transactions, but it’s the accountant’s job to know what they mean. This analysis can include everything from calculating accounting ratios to adjusting the overall ledger. Accountants also check out historical data to identify trends, like increasing expenses, decreasing revenues, or product profitability.

Taxes: one among the simplest reasons to possess an accountant on board is for tax purposes. While accountants can help with preparing tax returns, it’s what they carry to the table regarding tax deductions, tax planning, and ways to scale back liabilities that make them so valuable. We all need to pay taxes, but accountants can show you ways to scale back your annual bill.

Financial planning: Accountants are trained to seem at the large picture. While bookkeepers can spot trends, accountants can provide specific information and advice on the way to usher in more revenue, cut expenses, and makes your products more profitable, among other things. Accountants also can offer advice on things like business structure and expansion.