A lot of people tend to assume that accounting and bookkeeping are the same, but there are a couple of differences between the two. While bookkeeping and accounting deal with financials, one records financial data and the other interprets it. As a bookkeeper, the job involves recording all financial transactions that take place. As an accountant, they analyze and summarize the data that has been recorded by a bookkeeper. Both are integral in keeping the financial aspects of a business in order, but you will need a bookkeeping service in order to make sense of your financials. Below are the types of bookkeeping that are used for bookkeeping service.
Types of Bookkeeping
- Single-Entry: If you have a small business or have minimal transactions that take place, single-entry bookkeeping is the method that should be used for your business. It’s not the most detailed method for bookkeeping as it only requires you to record revenue and expenses. This wouldn’t work for a bigger business because it doesn’t require the need to record accounts payable or receivable.
- Double-Entry: For larger businesses that have two or more accounts, a double-entry system is needed. It’s more complex but considering bookkeepers have to record debits and credits of transactions. Because of how detailed it has to be, it is very reliable for financial records and you can see where you have gained or lost in profits.