The term Accountant and Bookkeeper often creates confusion for some people especially those who have no background in accounting. Bookkeepers near me can help you if you want to know more about accounting and bookkeeping field. So, what distinguishes the two? The following explanation:
Accounting is the process of recording, classifying, summarizing, processing and providing transaction data and information related to finance. Thus the information presented can be used for decision making or other purposes.
Then the bookkeeper or bookkeeping more emphasis on analysis activities. Bookkeeper activities are limited to recording transactions. While in accounting, accountants do the analysis and then make decisions.
Then who uses the financial information created by the accountant? Two parties can take advantage of the financial statements, namely internal and external parties.
Internal parties are parties within the organization. Where management is the party most in need of proper and accurate financial statements to make the right decisions as well. For example, the top leadership who needs financial statements to see the company’s financial position to determine whether to buy a new machine or not.
While external parties consist of:
1. Investors: need financial statements to decide whether to buy, hold or sell an investment. Shareholders also need these financial statements to assess the company’s ability to pay dividends.
2. Employees: information related to company stability and profitability needs to be known to employees.
3. Lenders: to determine whether the company can repay loans and interest on time.
4. Suppliers: use financial information to determine whether the amount due can be paid when due.
5. Customers: so customers can assess the sustainability of a company especially if they are bound by cooperation or agreement with the company.
6. Government: by knowing the company’s financial statements, the government can regulate company activities, determine exposure policies and prepare statistics.
7. Society: to determine the company’s contribution to the national economy and the development of the company and its activities.