Bookkeeping and accounting often get used interchangeably, but they’re not quite the same thing. While both are essential to keeping a business financially healthy, they each serve a unique purpose. Let’s break down the key differences between the two.
What is Bookkeeping?
Bookkeeping involves keeping track of a business’s day-to-day financial transactions. That means recording things like sales, purchases, income, and payments to ensure everything is properly documented and organized. It’s the foundation of good financial management. Without it, it’d be hard to know what’s coming in, what’s going out, or where things might be slipping through the cracks.
Back in the day, bookkeepers used ledgers to jot everything down by hand. These days, tools like QuickBooks, Xero, and Sage make the job much easier. Most bookkeepers use either a single-entry system (great for small businesses) or a double-entry system (for more detailed tracking) to stay on top of transactions.
At Books & Benchmarks, we use QuickBooks Online for optometry practice bookkeeping, which offers many benefits for practice owners. It’s an intuitive, all-in-one platform that makes managing your finances simple. You can easily track income and expenses, reconcile bank accounts, generate reports, and get everything organized for tax season. It also makes collaboration with your accountant easier, so you can spend less time on books and more time on patient care.
What is Accounting?
Accounting goes a step further than bookkeeping. While it does include recording transactions, it’s really focused on making sense of the numbers. It involves organizing, analyzing, and summarizing financial data to provide a clear picture of how your business is doing.
It plays a big role in strategic decision-making, too. Accountants often help with things like tax planning, audits, and preparing financial statements to keep everything running smoothly and by the book.
When you use Books & Benchmarks for your bookkeeping, you’ll have clean, well-organized financials that make year-end tax prep a whole lot easier for your accountant or CPA.
Final Thoughts
While bookkeeping and accounting can overlap, they each play their own important role. Bookkeeping keeps everything organized and accurate—it’s the foundation. Accounting builds on that foundation by analyzing the numbers and offering strategic insights to help guide smart financial decisions.
At Books & Benchmarks, we go beyond the basics by giving practice owners data-driven insights and optometry benchmarks to show how their financials stack up against others in the industry. For more information on how we can help optimize your practice’s financial health, please contact us today.
