For many entrepreneurs, finance is a complicated task. While most businessmen have superior marketing, sales, and strategic skills, some of them lack the knowledge in keeping their finances in order. They just want to delegate the detail-oriented and number-crunching tasks to some financial professionals.
If you’re one of those big-picture thinking, small-scale entrepreneur, you may want to entrust your recording and analysis of your finances to one of the bookkeeping and accounting firms in Dubai. But because of your lack of knowledge about the distinction between accounting or bookkeeping, you’re still unsure which of the two should you hire.
Main Differences Between Bookkeeping and Accounting
While the functions of the two disciplines overlap, differences remain. So, what’s their difference? Read on.
Practitioners of this discipline are responsible for taking records, storage, and retrieval of financial transactions for a business venture, nonprofit organizations, and individuals. Some of their regular tasks involve:
- Billing of the products sold, or services are given to clients
- Keeping and recording receipts from customers
- Checking and recording invoices from suppliers
- Paying suppliers
- Preparing payroll and salaries of employees
- Processing and liaising reports submitted to government agencies
- Recording adjustments in financial records, such as depreciation
- Providing financial reports
Accountants record financial transactions of a business in a systematic and comprehensive manner. Moreover, these professionals summarize, analyze and report these recorded transactions to stakeholders, regulators and government agencies.
As you can see bookkeepers and accountants appear to perform the same set of tasks. Both store, record and prepare reports of business transactions. Nowadays, they also use the same set of tools and software.
But on close inspection, the differences will start to unravel. Bookkeepers only require some basic accounting subjects while professional accountants need to finish a full bachelor’s degree. Some even pursue to become a certified public accountant (CPA). Bookkeepers are responsible for the day-to-day, actual recording and preparation of basic financial reports while accountants analyze, verify and gain insights from these documents.
So, if you just need to document the transactions, organize important papers and produce a financial report for stakeholders and government compliance, hiring a bookkeeper is enough. But if you want a comprehensive get insight and relevant information from the data you’ve gathered, you need to ask help from an accountant.
Why Hire a Bookkeeping and Accounting Firm?
For especially for start-ups and small to medium businesses, hiring an in-house bookkeeper or accountant can be too expensive. Meanwhile, doing the accounting tasks on your own will eat up a huge chunk of your precious time. After all, you just need the services of these professionals intermittently. If you have this business condition, you may want to outsource accounting and bookkeeping services in Dubai. Here are some of its proven benefits:
- Better accuracy – These professionals do this for their living. As such, they have gained a wealth of experience needed to produce quality results. Accurate recording of numerical data is crucial to your business. You may incur huge losses or inconsistent entries that can endanger your business, especially if you’re submitting the report to government agencies. To save your face and your business from having huge discrepancies in reports, it’s best to hire bookkeeping services in Dubai.
- More savings – Employing a full-time or even a part-time accountant is costly. Apart from her regular salary, you may need to process government-required benefits and perks. You can save a huge amount of money by outsourcing the task. When you outsource the task, all you need to do is to pay only the services of the professional by the hour. This will save you money while hiring a full-fledged professional.
- Access to the best software and systems – To remain competitive, accounting firms uses the most sophisticated tools, equipment, and software to provide the best service to their clients. Hence, you can be sure that you get the best tools and professional practices in the industry. What’s more, these companies are also members of professional associations that require strict compliance with industry standards. Hence you can be assured that they only provide quality services, otherwise they will lose clients.
- More time and focus on your business – As mentioned above, accounting takes a lot of time. By engaging in this task, you can lose your attention to more important parts of your business. To prevent losing your focus to the things that matter in your enterprise, you may just outsource the task to professionals who can provide the best results.
For most entrepreneurs, distinguishing bookkeeping from accounting is already a struggle. To free yourself from worries about the financial recording and reporting aspects of your business, outsourcing your accounting requirements is a great and wise move.
KBA: We are one of the Top Bookkeeping and Accounting Firms in Dubai
KBA Accounting and Bookkeeping Services LLC is a recognized and registered accounting services provider catering to businesses in the city of Dubai and across the UAE. We offer a comprehensive range of outsourced financial solutions that are aimed at helping businesses improve their cash flow and raise their bottom line. We have a team of certified accountants, consultants, and payroll specialists who can develop a more effective system for managing and monitoring the financial health of your business.