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Accounting and Bookkeeping 


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Every business, regardless of its size, needs an organized system to track its finances. Keeping accurate records through bookkeeping and accounting not only helps in preparing financial reports at the end of the fiscal year or quarter but also enables a company to assess its financial health and make informed decisions for the future.

While bookkeeping and accounting are closely related, they are not the same. Bookkeeping forms the foundation, while accounting builds on that foundation to provide deeper insights into the business's financial standing.

Bookkeeping is the process of recording and organizing all financial transactions in a company’s ledger. This includes all daily financial activities, such as sales, purchases, expenses, loans, and more. The goal is to systematically capture each transaction as it occurs in a chronological order, ensuring that the books of accounts remain up-to-date.

A bookkeeper's role is essential for tracking the company’s daily financial operations. By recording payments, revenues, tax payments, payroll, and other activities, bookkeeping ensures that the business maintains a clear and accurate record of its finances. Without precise bookkeeping, the accounting process would lack the necessary data to generate accurate financial statements.

Accounting, on the other hand, involves interpreting, analyzing, and summarizing the financial information collected during the bookkeeping process. This step transforms the raw data into meaningful reports, such as income statements, balance sheets, and cash flow statements. These financial documents provide a comprehensive view of the company's financial health over a specified period.

Accountants use this data to give business owners and stakeholders insights into the company’s performance, helping to evaluate profitability, liquidity, and overall financial position. This information is crucial for making strategic decisions, ensuring regulatory compliance, and presenting the company’s financial standing to investors, lenders, and government bodies.

Accurate bookkeeping is the bedrock of sound financial management. Without organized records, a business cannot accurately gauge its financial performance or prepare reliable financial statements. Accounting builds on this data, offering critical insights into how the business operates and where improvements can be made.

Though bookkeeping and accounting work hand-in-hand, they serve distinct purposes within a business.

Aspect Bookkeeping Accounting
Focus Recording daily financial transactions Analyzing and interpreting financial data
Purpose Maintain a systematic record of financial activities Provide insights for decision-making and compliance
Scope Narrow, involves basic tasks like data entry Broader, includes financial analysis and reporting
Outcome Provides the raw financial data Produces financial statements (e.g., balance sheet)
Skills Required Clerical skills; no specialized training required Requires specialized knowledge and accounting skills
Tools Used Ledgers, journals, bookkeeping software Financial statements, accounting software
Reports Prepared No formal financial reports Prepares income statements, balance sheets, etc.
Relationship Serves as the foundation for accounting Builds on bookkeeping data for in-depth analysis
Compliance Focuses on transaction accuracy Ensures compliance with financial regulations



  • For Accounts Subject to Audit: The deadline is October 31st of the assessment year.
  • When Reporting with Form No. 3CEB: The due date is November 30th of the assessment year.
  • For Non-Audited Accounts: The deadline is July 31st of the assessment year.

How to Complete the ITR 6 Form

To ensure a smooth and accurate filing process for the ITR-6 Form, follow these recommended steps provided by the Income Tax Department:

  1. Part A
  2. Schedules
  3. Part B
  4. Verification

Adhering to this sequence helps organize your information and simplifies the completion of your income tax return.

No Documents Required

When filing the ITR-6 form, you do not need to attach any documents, such as TDS certificates. However, it is important to reconcile the taxes deducted, collected, or paid on your behalf by comparing them with your Tax Credit Statement Form 26AS.

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