Many people use the terms bookkeeping and accounting interchangeably, they
have some similar functions but are different.
Bookkeeping and accounting both are useful to record a business' activity. For instance, both can encompass record keeping activities, such as summarizing income and expenses on a monthly, quarterly and/or annual basis; bank reconciliation, statement of operations (both balance sheet and profit and loss reports; and preparation of information for city, county, state & federal reports.
Whereas bookkeeping is generally limited to recording and summarizing business activities, accounting also involves auditing, forecasting, financial planning, evaluating and opinions. Some business are required to have reports and audits prepared by Certified Public Accountants.
With bookkeeping and accounting there are two types of systems used to record business activities: (1) a single entry system and a double entry system. The single entry system is adequate for most small to medium size businesses, and is a common system used by many businesses whether they use in-house or independent bookkeepers. There are many accounting systems that bookkeepers work well with; (2) the double entry system is more complex and requires a more thorough understanding of generally accepted accounting principles. Although a degree in accounting is very beneficial, it's not necessary to employ this system.
Although larger business will have staff bookkeepers and/or accountants, having a full time bookkeeper for the smaller business such as a sole proprietor, partnership, or corporation, the cost of a staff bookkeeper or accountant is not feasible. So, the small independent business is stuck learning how to maintain proper records for city, county, state, and federal reports OR use an outside source to help with these important tasks.
As a previous IRS tax auditor and IRS criminal investigator, I can relate numerous occasions where taxpayers unintentionally got in trouble with the IRS because of the lack of records or poor recordkeeping. Good record keeping not only helps comply with IRS reporting requirements but is critical in responding to an IRS audit or inquiry. The good Tulsa bookkeeping practices of Glass Tax Service will actually provide a good first impression to the IRS and/or other government entity such as city or state.
As your Tulsa Tax firm, we are pleased to be your first choice for Tulsa Bookkeeping and Tulsa Accounting services.