Accounting and Bookkeeping
Provided by Visa, Content Partner for the SME Toolkit
What's the difference between accounting and bookkeeping? Accounting is the process of managing and forecasting a business's finances. An accountant advises a business and prepares financial reports. Bookkeeping is part of the accounting program; it refers only to the recording and maintenance of your financial records. A bookkeeper inputs information and keeps your accounts up-to-date.
Solutions for Number-Phobics
If you're an accounting novice and you've been dreading having to finally deal with business bookkeeping, don't worry. Even if you hid in the back of the algebra class, there are simple accounting solutions available to you. Here are three common approaches to bookkeeping.
- I don't want to deal with numbers (except to periodically review financial information).
Hire someone. If you're weak with numbers, too busy, or just don't want to think about it, hire a bookkeeper or accountant to handle your numbers. Go over your financials on a regular basis (monthly or quarterly) with your bookkeeper. By the way, accounting costs are tax deductible.
- I want to handle some of it and use an accountant for other tasks.
Buy an accounting software program such as QuickBooks, Microsoft Accounting, or Peachtree Accounting. We'd recommend not installing the software yourself but instead have someone else install it—for example your bookkeeper, accountant or a qualified expert with knowledge of the specific program. That way you end up with the proper reports and charts customized for your accounts. These software programs also save you considerable time because you don't need to input credit card and banking information. Nowadays, banks and card providers allow you to download your financial data directly to your computer.
- I want to handle all of it.
If you want to do it all, we'd recommend one of the accounting programs mentioned above or a customized software accounting solution created for your business. Since you will also be preparing your own taxes, we recommend that you use a tax program that integrates with your software.
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