It is virtually impossible for business and commercial entities today to perform well without having accurate and reliable financial data as a base to make important decisions.
Since the underlying purpose of any corporation is to churn up profits, and the fundamental ingredient in commercial ventures is money, the recording, keeping, and analysis of financial data and information is crucial to the performance of the business, and the ability to derive guidance from key variables garnered from the area, including margins, and cash flow.
The extent to which organizations will go to address the accounting needs depends on the capital they have at their disposal, which is often reflected in the size of the business.
While larger entities that often have a duty to shareholders and are listed on the stock exchange will make use of highly skilled professionals in the field of accounting, small businesses will chose to side with something more prudent; bookkeeping services that can cover a majority of its transactions.
Overlap
Even though bookkeeping is a large part of the general accounting process, it is impractical to label both aspects the same.
Both, bookkeeping and accounting are meant to gather and keep the most relevant financial data and preserve transactions, but there are certain important distinctions between the two.
Classified broadly, while bookkeepers record financial transactions to help ensure the business does not encounter small hiccups, accounting services in Dubai fit into the next stage, that is, the analysis and reporting on the financial data put together by the bookkeeper.
As such, the accountant is put in a position where he or she can analyze and therefore advise on aspects of the business as well.
Bookkeepers
Bookkeeping personnel are important to the general and daily function of the business as far as its finances are concerned. There responsibilities may include:
- Dealing with ingredients of financial transactions, including receipts and invoices
- Supervising the payroll
- Drafting preliminary financial statements
- Implementing accounting systems and software
- Performing accounts reconciliation and reports
- Overseeing accounts payable and receivable
Accountants
Accountants are in a better position to analyze all of this data, especially with the use of previous records as a yardstick, and therefore capable of generating advice of the future courses of action in the financial context.
Specific tasks carried out by accountants include:
- Providing advice on financial management
- Carrying out auditing procedures
- Giving advice on taxation regimes and liability
- Ensuring compliance with regulatory rules.