It is a common mistake to confuse bookkeeping as accounting. There is a difference between the two. Bookkeeping is the act of recording all financial transactions by an individual or an organization or business such as purchases, payments, and sales and is done by a bookkeeper. Accounting, on the other hand involves making a report out of the recorded financial transactions done by the bookkeeper and would involve the service of an accountant.
Although it is not common for companies to need assistance or services from an outside organization or from another company to record all its financial transactions from its business operations, there are still businesses who decide to avail of such service. Some of the multiple reasons why some companies decide to seek bookkeeping services include the aim to avoid increasing their payroll as compared to hiring an individual or group to be the company’s bookkeeper. Another reason is because of the fact that there are some bookkeeping services that offer consulting services, making it easier for the company or management to understand how their operational and managerial decisions have a financial impact over the business.
Depending on the types and amount of the services needed by the company, some bookkeeping services may offer basic to intermediate accounting including functions like accounts receivable, accounts payable, financial statements and disbursements.