Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Difference Between Bookkeeping and Accounting #shorts

7 Jul 2023 · 1 min

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Short explanatory video by Bob Gauvreau distinguishing bookkeeping and accounting. Bookkeeping is described as day-to-day management of financial data: recording transactions, matching bank activity, categorizing expenses, maintaining the general ledger, and performing reconciliations. Accounting is presented as a higher-level oversight function focused on financial reporting (balance sheet, income statement/profit & loss), interpretation, and ensuring reports make sense.

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Let's talk about the difference between accounting and bookkeeping. So bookkeeping is really the day to day managing of the finances inside a business. So bookkeeping would entail recording all the transactions that go through a business, matching up what's going through the bank account to the records inside the accounting software or inside the platform, making sure that we're allocating all the expenses to the right categories, but mostly managing the data that goes into what we refer to as a general ledger, making sure as well at a higher level of a bookkeeping function to make sure that everything is getting reconciled. The accounting side is more of an oversight, higher level side. So for me, accounting really looks at financial reporting. We would need to be looking at the balance sheet, the statement of income or a profit and loss statement. The accounting side is looking at those reports and making the data makes sense, understanding how to interpret it and understanding what these reports mean.