ACCOUNTING AND BOOKKEEPING
Accounting and Bookkeeping are both very essential
financial functions, and while they might be mistaken to be the same thing – they’re actually very different from one another. Let’s first understand what each one stands for.
Bookkeeping is the art of identifying and maintaining accounts and financial statements. Accounting is the process of summarizing, interpreting, and analyzing financial transactions which were classified in the records.
This stands to be the basic difference between Accounting and Bookkeeping. They’re very inter-dependent but they have their share of similarities and differences – and many accounting firms in Dubai can take you through the same process.
The major difference is that the management can never take crucial decisions based on bookkeeping records, they would need a thorough analysis which can be provided by tax firms, to be able to take important decisions in the business. Also, the next major difference would be the objective why both these functions are carried out – Bookkeeping is done to maintain records in one place and to be able to serve it as and when required, while the objective of Accounting is to understand the standing of your business. It helps you gather exactly where you stand in the financial world, and what needs to be taken care of. Also, another important thing to note is that bookkeeping is a direct process and doesn’t require specialist skills whereas Accounting requires a specialist to make important and relevant inferences and help the management take decisions.