The Difference Between Accounting and Bookkeeping Services
May 16, 2022
May 16, 2022
Many people, especially those who have no actual experience with accounting and bookkeeping services, think that these services are the same. Some even use accounting and bookkeeping interchangeably, as they believe it is okay to replace either term with the other. Who could blame them when, in fact, many of us have fallen victim to the same circumstance before? Fret not because, in this article, we will meticulously break down the differences between accounting and bookkeeping services Singapore.
Simple Analogy of the Difference Between Accounting and Bookkeeping Services
Bookkeeping and accounting may look similar to an outsider’s point of view since they only see the surface of what bookkeepers and accountants do on a daily basis. However, if they go deeper than the surface, they can quickly point out the difference between these business support solutions.
Although accountants and bookkeepers may have varying functions and areas of responsibility, both of them will be working towards the same goals. The most straightforward analogy of bookkeeping and accounting services can be compared to a nurse and a doctor’s roles. Even if their tasks overlap, they only have the same objective—to provide quality health care to patients in need.
The interconnected relation of bookkeeping and accounting services in Singapore might be the reason many see them as one thing. Both services commonly cover financial data, require basic accounting knowledge, and deal with periodical reporting. Albeit these processes may be different at their cores, each one of them has its unique set of benefits.
For a business owner, understanding the difference between accounting and bookkeeping services is undoubtedly helpful in growing a company. There is no time like the present to begin learning how business support services, like accounting and bookkeeping, differ from each other. Other than that, understanding the similar areas these services cover will also be beneficial in managing an enterprise.
Know More About Accounting and Bookkeeping Services Below
Without a doubt, accounting and bookkeeping services are both crucial in managing your finances, specifically business assets, income, profit, and loss. Despite the similarities of these two services, you will spot some main differences if you take a good look at them. The best way to fully understand the distinction between accounting and bookkeeping services is by learning their real nature. We will get to know more about each of them below.
What Is Bookkeeping?
At its simplest form, besides focusing more on recording and organising financial data, bookkeeping also covers the process in which financial transactions are identified, measured, and ordered strategically in a consistent manner. Moreover, bookkeeping is considered the first step of accounting, as it involves the preparation of payroll and invoices. Posting debits and credits and reconciling company credit cards are part of the bookkeeping process as well.
Even if bookkeeping services provide data that is not significant in making important business decisions, bookkeepers are still required to be accurate in their tasks. Aside from that, a qualified corporate bookkeeper should be knowledgeable about subjects related to finances and their roles and responsibilities in your company.
If you hire a bookkeeper to work in your enterprise, ensure they are well-educated in accounting fundamentals. With that qualification at the forefront of your company, balancing ledgers, subsidiaries, and historical accounts of sales and expenses records will be much easier.
What Is Accounting?
Because bookkeeping is the first step of the accounting process, it cannot proceed without efficient bookkeeping services. That being said, one could not thrive without the other in an ever-changing business environment. By managing and monitoring your business’s financial situation as well as extensively communicating information related to your financial health, accounting services are the best tools for summarising, analysing, and interpreting financial transactions in the ledger account.
But a corporate accountant’s duties do not end there. Indeed, being a certified public accountant (CPA) in Singapore is both challenging and fulfilling. The challenge may come from the tasks a CPA must take on with expertise and knowledge, such as ensuring the accuracy of financial documents, preparing and maintaining financial reports, complying with tax obligations, assessing financial operations, and partaking to reduce costs and forecasting financial trends.
Many corporate service providers of accounting and bookkeeping services Singapore claim that they offer the best services. Despite all their claims, it is necessary to critically assess whether to hire an in-house accountant or outsource services from another company. Whichever option you choose, it has its own set of benefits.
Functions in line with accounting require special skills because of the complexity and analytical nature of the job. The lack of those things could lead to underperformance. Also, an accountant will not be able to create charts of business accounts, outline your company’s budget, or write a winning loan proposal if they don’t acquire the particular skill set required to do their jobs right.
The Ever-Changing Business Landscape in Singapore
Singapore is known as one of the most business-friendly places globally. All this is due to the country’s tax policies and smooth business incorporation process. It is also the reason why many foreign investors are enticed to start a business in Singapore. Because of the growing number of businesses being registered in the country every year, it is not surprising that the existing policies, laws, and regulations every business used to comply with are constantly changing.
Bookkeeping and accounting have witnessed drastic changes the Singaporean business hub underwent over the years. With the advent of new technology and innovation, like accounting software, the line that separates both practices is fading. The modern way of bookkeeping is slowly absorbing some accounting functions. For example, generating financial statements, which was previously part of the accounting process, is now easily undertaken using bookkeeping software.
Turn to ContactOne to Focus on Growing Your Business More Than Ever
Bookkeeping software easily takes on various bookkeeping tasks. With that, the task inclined with keeping the business accounts books in Singapore seems obsolete. But only time will tell when it will happen. Let ContactOne provide you with accounting and bookkeeping services in Singapore so that you can focus on growing your enterprise. We will get things done in the best interest of your business. Call us now on +65 6333 0633 or +65 8666 3633.