Since 1300s, double-entry bookkeeping was deployed in its modern form, while minor innovations have occurred since then. Back then the system itself was lacking in many aspects, but with today’s computers, networks, and cryptography, we now have the opportunity to create a system of accounting that brings us into the 21st century–a system that looks beyond numbers in ledgers and utilizes machine learning, multiparty computation, and algorithmic representation to redefine “value".
Accounting underlies finance, business, and enables the levying of taxes for building companies, and managing resources at scale. Accounting predates money, and was originally used by communities to track and manage their limited resources, crucial in every scale of businesses. In fact, it is the way that the company keeps track of almost everything of value. Accounting typically consists of:
financial statements and reports
analyzing business performance
While Bookkeeping is the process of recording your company’s financial transactions into organized accounts on a daily basis. It can also refer to the different recording techniques businesses can use. Keep in mind that Bookkeeping is an essential part of your accounting process for a few reasons. When you keep transaction records updated, you can generate accurate financial reports that help measure business performance. Detailed records will also be handy in the event of a tax audit and ultimately help you make a data-based decision.
Bookkeeping typically consists of:
receipts and bills
recording business transactions
Note that the tasks of bookkeepers and accountants may vary between businesses. Bookkeepers working for smaller businesses might do some basic accounting duties. There’s often overlap, and the duties may change a lot from one business to another.
The technology of the financial system nowadays is built on top of a way of thinking about money and value that was designed back when all we had were pen and paper, and when reducing the complexity of the web of dependencies and obligations was the only way to make the system functionally efficient. Yet most people are not aware of the technology, a problem that can be solved by hiring an accounting and bookkeeping agency. Keep a keen eye to choose your agency because the report of these kinds of data is crucial in decision-making.