Bookkeeping vs. Accounting for the Private Practitioner
Today, while speaking with a potential private practice client, he asked a powerful question that I am sure many of you have:
What is the difference between bookkeeping and accounting?
Bookkeeping is a function of accounting. It is transactional.
It is the recording of your practice’s daily transactions. Daily transactions include producing invoices, paying bills, running payroll and reconciling accounts. These tasks allow you to create different financial statements.
Accounting is transforming the daily business transactions into financial statements that are easily understood by the practitioners/clinician.
The accountant will:
- Ensure that the bookkeeping is accurate
- Prepare the financial forecast
- Develop financial analysis
- Prepare financial strategy
- Prepare estimate tax payments
- Prepare yearly tax returns
Both bookkeeping and accounting are equally crucial to the present and future success of your private practice.
If you are looking for both accounting and bookkeeping support, please give us a call. We are here to help and educate.