How does accounting differ from bookkeeping?

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Bookkeeping is part of the accounting process as a whole, but there is a big difference between bookkeeping tasks and typical accounting tasks. Bookkeeping is the process of gathering, classifying, and recording all a business’s financial transactions. A bookkeeper is more like a data-entry position, but they must have the knowledge necessary to handle the books and be meticulous when it comes to recording the information. Your books need to be accurate and up to date to be of any use.

An accountant will then take the information the bookkeeper prepared and analyze and interpret it. An accountant uses their knowledge and expertise to offer their view on how your business is performing and what can be done to improve that performance. An accountant will also take care of all your tax needs using the information from the bookkeeper come tax season.

Having both a bookkeeper and an accountant is important and ensures the whole accounting process is being handled in the best way possible. An accountant has more education and certifications than a bookkeeper, so they tend to cost much more to hire. Hiring a bookkeeper for the bookkeeping and an accountant for the rest of the accounting process ensures your money is being well spent.

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