Bookkeeping or accounting?
People very commonly get confused between these two as these seem to be the same. It can be said that bookkeeping is a small yet significant part of accounting as it is used to provide the true picture of incoming and outgoing of funds from a business. Whether it is business bookkeeping or individual, it provides significant information and detailed analysis of the financial statements.
Business Bookkeeping – The Basics
Under bookkeeping, all the transactions taking place in a business are recorded into account books. The category of incoming funds consists of sales, investments, loan, personal compensation and other resources of revenue. The other category that is the cash outflow encompasses operating costs, employee compensation, loan payments, etc. A comparison between the net amounts in both the categories can reveal the true condition of a business with a numeric proof.
Challenges in Bookkeeping
Significance of Bookkeeping
As accurate bookkeeping can provide the precise information about the actual condition of a business, it will prove to be very helpful in the decision making process. In a business, incorporating favorable changes is a constant process for continual development. No business wants to be in its current situation after a decade so changing policies according to its performance is crucial.
If you know what works for your business, you will never look back and your business will achieve new heights of success.
