Bookkeeping vs Accounting: What's The Difference? (2024)

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Updated: Oct 14, 2022, 12:49am

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Bookkeeping is the daily financial tracking of all of your daily financial transactions. The bookkeeper of a business might choose to use online bookkeeping software to track everything.

How To Find a Bookkeeper

Bookkeepers don’t need any specific certifications, but you want to make sure whoever works on your company’s bookkeeping is extremely organized. Even if you are using an online system for bookkeeping, delegating an employee with keeping track of it on a daily basis is very important.

Accounting is for trained professionals who can give a fuller summary of your company’s financial realities. Accountants rely on financial statements from bookkeepers to do their work, but they also look for larger trends and the way money works across the business.

How To Find An Accountant

Accountants are more specialized, so not every company has an in-house accountant. You can use a firm or work with accounting software for your business needs.

Both bookkeepers and accountants need to be comfortable working with numbers all day. Bookkeepers especially should be able to spot issues with daily expenses and make sure all the data points are tracked correctly.

Bookkeeper Duties

Bookkeepers are extremely involved in daily company operations. They need to be involved in every process where payments occur. Bookkeepers need a strong grasp of all financial details in the company so they know if there are any inconsistencies.

Accountant Duties

An accountant needs strong and accurate bookkeeping to do their work. However, their work is different. They look at all of the financial details of a company so they can make larger decisions about how the business operates.

Accountants advise leadership on how to make more strategic financial changes that save the company money or generate more profit. For some of the businesses that they do, accountants also need to be registered certified public accountants (CPAs).

In addition to daily finance tracking, bookkeepers manage the following process:

• Managing payroll for employees
• Tracking invoices from vendors, contractors, and more
• Keeping track of bill payments

The bookkeeper should be able to answer all questions about daily finances and the status of payments.

On the other hand, an accountant uses financial reports from the bookkeeper to do other kinds of analysis work:

• Budget management and changes
• Managing tax filing and returns
• Analyzing and advising business operations

Accountants are largely responsible for the financial health of a business. If they notice expenses are going over budget or under budget, they can look into what’s causing this discrepancy and make recommendations to resolve these problems.

Bottom Line

Bookkeepers and accountants are both critical for the financial health of a company. If you’re not tracking daily expenses, you’ll have very little information to give to your accountant and they won’t be able to make informed decisions. If you’re only focusing on expenses and not big-picture financial data, you’ll miss out on some strategic opportunities.