Accounting vs. Bookkeeping – What’s the Difference?

The words “accounting” and “bookkeeping” are often used interchangeably.  But the differences are large.

A bookkeeper records the day-to-day transactions of a business.   This includes entering and paying bills, creating invoices to clients, reconciling the bank statements and processing payroll, among other tasks.

An accountant takes the information created by the bookkeeper and interprets it, creates adjusting entries, financial statements and other reports, and analyzes and presents the information to the business owner, shareholders or other interested parties. 

Of course, all these tasks can be done by the same person, but someone who does only bookkeeping tasks should not take the title of Accountant.

 
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