Difference Between Bookkeeping and Accounting Philippines
PUBLISHED: June 23, 2021
As the saying goes, “accounting is the lifeblood of a business”. While accountants make that happen, bookkeepers take the pulse of the business. Many people thinks that bookkeeping and accounting are fairly similar to each other but others think otherwise. Although both are equally important as the other, what is the difference between bookkeeping and accounting Philippines? In this article, let us tackle the definition, difference, and knowing when to hire an accountant or bookkeeper.
DIFFERENCE BETWEEN BOOKKEEPING AND ACCOUNTING PHILIPPINES
Bookkeeping is the process of recording day-to-day transactions from financials, sales, purchases, receipts and payments while accounting is the process wherein all the data are summarized, corrected, analyzed, reported, and presented. It is both important to have an accountant and bookkeeper at the same time as the two provides significant data for the company to continue its operations. In summary, bookkeeping provides the data of the whole organization while accounting turns such data to information which is vital to the organization’s decision makers.
BOOKKEEPER’S DUTIES AND TASKS
As the data that bookkeepers provide are fundamental to accountants, they need to be consistent in doing their day-to-day tasks. These tasks and duties can be as follows:
✓ Recording of financial dealings and transactions
✓ Imposing and monitoring bookkeeping rules and regulations
✓ Posting debit and credit
✓ Handling bank activities
✓ Managing Payroll
✓ Maintaining company records and backups
These tasks may vary from company to company but one of the most important duty of a bookkeeper is to maintain the company’s general ledger. With all the technology available today, this ledger can differ from a simple sheet of paper to a dedicated bookkeeping software.
ACCOUNTANT’S DUTIES AND RESPONSIBILITIES
Accountants are responsible to “see the bigger picture” of the company data provided by the bookkeepers. These responsibilities consist of:
⚫ Data Collecting
⚫ Information Verifying, Correcting, and Analyzing
⚫ Entry Adjusting
⚫ Regulatory Complying
⚫ Decision Making
Some small companies where there is only an accountant, he/she will tend to do all the bookkeeper’s works. But is task and responsibility assignment cannot be done from accountant to bookkeeper as being an accountant requires certain degree and license.
WHEN TO HIRE: BOOKKEEPER AND ACCOUNTANT
It is difficult to determine when and where to hire an accountant or a bookkeeper to do accounting or bookkeeping especially when a company is just starting, there are available accounting services in the marketing where they can outsource such service. This can be cost effective in some ways but when do a company needs to hire either of the two?
When a company chooses not to outsource accounting services, here are some indicators that it’s time to hire a professional:
- Government Compliance – being able to keep up with the fast-changing taxation policies especially in the Philippines, only skilled and experienced accountants can do the job.
- Growing Accounting Works – when a company’s accounting responsibilities start to take up too much time, other business functions can and will be compromised. This is the time to call either an accountant or bookkeeper to finish the job.
- Expanding Business – monitoring a small company’s accounting can be easy, but companies can’t be small forever, they need to grow too. Expanding business means growing accounting works. Bookkeepers are needed to keep track of the daily transactions while accountants are needed to check and interpret the data.
Hiring an accountant, a bookkeeper, or both can surely help one’s business. It is very much important to select the right person for the job who shares the same values, goals, and objectives as the company in order to have a harmonious and ‘balance’ workplace. Now you know the difference between bookkeeping and accounting Philippines to help you in deciding for your company.
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