Bookkeeping vs. Accounting: What They Do For Small Businesses India?

March 10, 2016

Bookkeeping vs. Accounting: What They Do For Small Businesses India?

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Small businesses India live and die by their cash flow and accountability. With the help of accurate recordings of transactions, coupled with proper assessment and processing, give small business owners India a firm base on which to make decisions and create plans for growth.

Fledgling small business entrepreneurs are often told that they should hire a professional to help with the accounting side of their companies. Because both bookkeepers and accountants offer services, understanding which one you need can be puzzling.

When most people think about bookkeeping and accounting, they would be hard pressed to describe the differences between each process. In this blog, the functional differences between accounting and bookkeeping are explained, as well as the differences between the roles of bookkeepers and accountants.

good accounting

Know The Bookkeeping & Accounting Difference

A bookkeeper’s territory is daily financial transactions, which include purchases, receipts, sales and payments. Recording these items is usually done through a general ledger or journal. Many small businesses use software such as QuickBooks or Peachtree to keep track of their entries, debits and credits. Their efforts culminate in a trial balance, which means the final total of debits and credits match.

Accounting is designed to turn data into information. 

The role of an accountant, therefore, is to verify the data entered, and then use that data to generate reports, analyze the account, perform audits and prepare financial reporting records, like tax returns, income statements and balance sheets. An accountant’s analysis of the financial information can provide information for forecasts, business trends, opportunity for growth and when to restrict spending to manage cash flow.

How Do Small Businesses Figure Out Which They Need?

Many times it depends on the industry and the level of expertise it requires. Questions usually asked by the outsourcing accounting and bookkeeping service provider to their clients in order to structure their services include:

  • What industry is the company is in?
  • Do they maintain a number of fixed assets or a large amount of inventory?
  • How many employees do they have?

The more complex the organization, the more important it is to make sure that the company’s bookkeeper is also supported by a good CA who can provide advice as and if needed. It’s a great partnership that keeps communication open and data strong.

How Costly Are Bookkeepers and Accountants?

Generally speaking, bookkeepers are less expensive than accountants, which makes them a great choice for a company that needs day-to-day expertise. A good bookkeeper can also act as the canary in the tunnel, offering attention to something that might need higher levels of advice. Pricing depends on geographic location and industry, as well as experience.

Bookkeepers are a great way to manage expenses, but having the periodic support of a accountant ensures that you have more than one set of eyes on the books. This not only helps to provide more accurate data, but also can act as a deterrent to fraud or theft.

How Do You Make Sure That You Are Hiring A Qualified Accounting or Bookkeeping service provider?

Ask for references, and call them.  A referral means a lot. You obviously don’t want your business to end up in a mess because of some naive mistake. Choose a professional outsourcing accounting and bookkeeping service providers who are experienced and working in this field for many years.

accounting consequences

When Should You Hire?

The earlier the better. Many small business owners will try to sort out the information themselves and then have a bumpy ride when it comes time to transition. A good compromise is to consult with an accounting professional when the business is started and then perhaps touch base periodically, such as once a quarter.

Ask for a quote or pricing, and fit in some sort of periodic meeting into your budget. Errors tend to continue until caught at year end or the next time a professional sees the books. Books that are set up correctly in the beginning can be a strong tool for measurement and growth.

Additionally, most accountants and bookkeepers are happy to answer a few questions, and they enjoy being able to see a business grow and for clients to be successful. After all, the basement startup today could be their biggest client tomorrow.

A successful marriage between bookkeeping and accounting will contribute to the long-term financial success of the business. Organized financial records and properly balanced finances produced by the bookkeeping and accounting processes are both key factors to this success.

Some business owners learn to manage their finances on their own, while others opt to hire an outsourcing accounting and bookkeeping service providers, so that they can focus on the parts of their business that they really love. Whichever option you choose, investing – whether it be time or money – into your business financial will only help your business grow.

SME Joinup has listed top outsourcing accounting and bookkeeping service providers for small businesses India.

 Radisson Consulting

Setting up the basic procedure of the accounting, timely adaption of the books of accounts, adherence to the compliance requirements of Income Tax, VAT Laws, Service Tax etc. all form a part of Radisson’s accounting services.

Every member of Radisson Consulting team is passionate about pulling our clients out of the proverbial boxes they inadvertently build for themselves. Every member of  Radisson Consulting team performs within the confines of their special and unique abilities.

 Adventus Business Services

Organizations, these days, not only look for cost-effective solutions to systematically run non-core activities like accounting and bookkeeping services, but also expect to add value in order to achieve better control and understanding of cash flow and thereby make informed decisions. In spite of being considered as non-core, accounting services form an integral part of an organization’s operational capabilities and systematic functioning. Therefore, outsourced accounting services definitely help streamline core business operations of startups.

 Sapphire Taxofinance

Sapphire Taxofinance Consultants Pvt. Ltd. offers  Accounting Advisory Services.  Their advisory professionals work with clients to provide and achieve complete financial compliance and to ensure that the accounting operations conform to the business objectives. They implement turnkey accounting systems and also advice clients to improve existing systems and thereby augment their organization value.

  Let’s Comply

LetsComply are a team of experienced Chartered Accountants, Company Secretaries, Cost Accountants, Corporate Lawyers, Management Graduates, IP Attorneys and Technologists. Their focus is to help entrepreneurs and business owners to start, manage and grow their business. By simplifying their legal, financial & taxation related requirements, they help startups and small businesses focus on innovation and expansion. They understand and appreciate the environment that entrepreneurs operate in and ensures excellence in providing focused, high valued, and service for these entrepreneurs.

LetsComply offer cost-effective and hassle-free financial accounting solutions for all fiscal needs of your business. Their accounting services are as good as employing a full team of seasoned in-house financial accounting experts without actually hiring them. They take time to understand precise accounting needs of your business, and plan desired procedures to seamlessly take care of all your financial accounting needs.

 

Call on 7838006101,  or email your query at request@smejoinup.com to know more! Also, click on “Get New Offers” for latest offers of SME Join Up!

 

imagecourtesy:articles.bplans.com, theheroesgroup.com,startwiththeboss.com

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