Your Back Office, LLC
Bookkeeping versus Accounting
You may have heard the terms Bookkeeping and Accounting. Classically bookkeeping described the task of recording all of the transactions that make up the business day in books called ledgers. The clerk(s) who did this work were called bookkeepers because they kept the books. Today, the ledgers are replaced by the computer.
Pages and pages of transactions recorded in a book, even if they are segregated by sales and expenses really do not say much about the business. When the transactions are summarized into a series of reports, then the business owner has actionable information. The job of summarizing and organizing the transactions into reports is the classic description of Accounting.
Modern computer software, such as Quickbooks provide an interface to enter transactions and the tools that create reports. The software supports both the bookkeeping and accounting jobs. Note that the term “supports” was used in the previous sentence rather than the term “does”. The missing component is the information you provide about your business and the information you need to run your business.