There are so many audit firms in Dubai assisting clients with business setup. Bookkeeping and accounting work to serve your company at different points. Bookkeeping and accounting are important procedures for all businesses to compile financial records at the end of the year. Bookkeeping and accounting allow businesses to examine their importance and can make future decisions.
A bookkeeper is someone who is in charge of keeping the records, whereas an accountant is someone who is in charge of the accounting. Bookkeeping and accounting are used side by side for business. Although bookkeeping and accounting are linked, both differ slightly. The main focus of bookkeeping is to keep records of financial transactions and to organize them.
While accounting makes use of bookkeeping records to present details about your company's financial records. Both of them appear similar because both bookkeeping and accounting handle financial data. Both bookkeeping and accounting have their benefits and are different from each other.
We will now explain some of the major differences between bookkeeping and accounting.
Bookkeeping
Bookkeeping is the process of keeping track of and recording a company's financial transactions into properly organized accounts. Bookkeeping services keep records of all the financial transactions daily, which will be further helpful for the creation of financial reports that are used to analyze the business performance.
Bookkeeping services keep records of financial transactions in the books of accounts, including tax payments, sales revenue, loans, interest income, wages, further operating costs, investments, etc. Bookkeeping services is an office task, and a bookkeeper does not need any specific expertise or skills.
Bookkeeping services include:
- Debit and credit posting
- Creating invoices
- Arranging financial statements (balance sheet, cash flow statement, and income statement).
- Maintaining and adjusting subsidiaries, general ledger, and historical accounts.
- Completing payroll.
Bookkeepers and accountants have almost the same task but have different skills. As bookkeepers do not require certified education to be successful in their profession, they must be careful about the validity and well-informed about essential financial topics. Bookkeeper's work is often supervised by the small business owner who they are working for or handled by an accountant. Thus the bookkeepers are not officially accountants.
Accounting
The process of examining, reporting, and recording the financial statements of a business is known as accounting. The financial statements provided by accounting are evaluated for financial transactions through an accounting period. These evaluations of a company’s financial situation, activities, and cash flows are provided by accounting.
Accounting evaluates financial data to make it clear and understandable for all parties involved. It helps them in the timely and correct maintenance of financial records for companies. Accounting creates financial statements that assist stakeholders in assessing a company's performance.
As a result, accounting gives you a better understanding of a company's real profitability and offers you cash flow. Accounting converts information from the general ledger into information that shows the overall position and direction of the firm.
Audit firms in Dubai have accountants to get assisted with strategic tax planning, financial evaluation, forecasting, and tax preparation. For accounting, audit firms demand a person with accounting expertise as well as an understanding of various accounting procedures and rules.
A bachelor's degree in accounting is essential for a person who wants to hold the position of an accountant. Finance degrees are frequently seen as suitable alternatives for individuals who do not have one.
Accountants can obtain further professional certifications, such as the Certified Public Accountant (CPA) designation, which is one of the most well-known accounting designations, if they have completed the necessary training and education requirements. Bookkeepers are not eligible for this position.
To become a Certified Public Accountant, an accountant must pass the Uniform Certified Public Accountant Examination and have professional accounting experience (CPA). The cost of an accountant is influenced by these required credentials.
Conclusion
The successful and long-term performance of a business is greatly affected by the bookkeeper’s maintained financial records, correctly balanced accounts, wise financial planning, and accountants' accurate tax filing.
Many company owners choose to engage with professionals to manage their finances. While others prefer to learn how to handle it themselves so that they may focus solely on the areas of their business that they genuinely like. Whatever option a business owner selects, investing in your company's finances, whether via time or money, will only help the business flourish.
Understanding the difference between bookkeeping and accounting is very important for managing your company's finances. The main goal of bookkeeping services is to offer information about your finances and to ensure that all financial activities are accurately recorded.
Hiring a bookkeeper or an accountant can make it easy for you to make a successful business decision. So, it's the best decision for you to hire an accounting firm, especially if you are based in UAE and want your business to be a part of the shimmering future of Dubai.
