Accounting is the process of recording, summarizing, and analyzing the financial activities of a business. The purpose of accounting is to provide a transparent view of the financial activity of a business, enabling informed decisions to be made. Accounting encompasses tracking a business's income and expenses and preparing financial statements to give stakeholders a picture of the business's profitability, cash flow, and strategic plan.
Bookkeeping is typically considered the more mundane task but is essential to all financial management. Bookkeeping is accounting's way of recording every transaction in a business, and while bookkeeping is straightforward, it is fundamental to all financial management. Bookkeeping tasks include logging all purchases, sales, receipts, and payments to confirm that all daily financial transactions are recorded accurately. Once bookkeeping is conducted in an organized fashion, accurate reports can be generated so informed business decisions can be made timely and consistently.
Inaccurate or incomplete financial records can have far-reaching ramifications for a business, from cash flow issues, missed payments to creditors, and unreported debts to compliance issues. Businesses are often unaware of their true financial position because they cannot rely on the accuracy of their financial records and therefore make poorly informed decisions, which can result in compliance issues or, worse still, loss of credibility.
WEchartered is one of India's leading accounting, auditing, and bookkeeping firms and is committed to providing financial clarity and control. We have expert financial knowledge and technical skills and ensure the compliance of accountability, procedures, operations, regulations, and legislation.
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