What’s the difference between bookkeeping and financial management | FAQs

2 minutes   |  CAREER ADVICE, FINANCE

People often confuse bookkeeping and financial management, but the differences are important if you want to ensure your finances are in order. While both are related accounting skills, they vary in important ways, and getting the right bookkeeping training is vital.

Watch this short video featuring Gareth Cotten, Head Tutor on the UCT Bookkeeping online short course, to find out more about how bookkeeping and financial management can both be used to help you lead your organisation to success, particularly if you’re a freelancer or small business owner.

Getting leading bookkeeping training and understanding the difference between financial management and bookkeeping, and how they work together could be your key to success as a freelancer or small business owner. Bookkeeping pertains to the documentation of different transactions, both into and out of the organisation. Bookkeeping is generally considered the compilation of financial statements that can then be used by the freelancer or small business owner to conduct sound financial management.  With that said, financial management refers to a focus on transactions that have already taken place and ensuring that they are correct and considering ways to better them in the future. Financial management deals with financials statements, that are used to consider things like budgets, profits and overall financial checks.

This seemingly straightforward bookkeeping tip could help you better understand how to conduct your financial business in a way that leads your organisation to success rather than being held back by details that are easy to control and improve on.


Want to get the right bookkeeping training to master booking and financial management confidently?

Register now for the University of Cape Town Bookkeeping online short course.


Transcriptions 

Bookkeeping is generally about putting together a set of financial statements. So you are taking source documents and transactions and compiling them to show a set of completed financial statements. Financial management on the other hand tends to be slightly more focused on using financial transactions that have already happened. So you are taking a set of financial statements and working with those to check in on things like budgets and profit margins and financial checks.