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What is the Difference Between Bookkeeping and Accounting?

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In order to understand the difference between bookkeeping and accounting, you have to look at the requirements for each job. There are accountants who do bookkeeping services and this tends to confuse the issue. Many accountants cannot give you a clear distinction between the two jobs. The main difference is in the duties that each individual performs.

You do not need an undergraduate degree to be a bookkeeper, which means the educational qualifications make a difference between bookkeeping and accounting. You do not need to have an undergraduate degree in accounting for bookkeeping, but you do need to have at least a two-year course from a vocational or technical college. There are eight different aspects to bookkeeping and in this type of job, you can work at one or more of these steps. In large firms, the accounting sector is divided into departments, such as accounts receivable, accounts payable or payroll, for example. These positions often have the job title of clerk, but when they are keeping the books and the general ledger of a company they are bookkeepers. They may also enter data into the computer so that the accountant can analyze it and prepare financial statements and reports. Many junior accountants also work in this area when they get their first job and start to learn all about how the company operates.

When you want to see the difference between bookkeeping and accounting, you must thing of the mechanical nature of each job. Bookkeeping duties are mechanical with a regimented process of entering data into the journals or ledgers on a recurring cycle. For example, in the job of accounts receivable, you may be responsible for entering all the sales transactions into the computer database for each different account. Working in accounts receivable, you would be responsible for entering payments received on accounts and crediting them to the customers involved. In a small company, one person may be responsible for both these duties as well as handling the payroll.



All accountants and bookkeepers, but not all bookkeepers are accountants. This is the main difference between bookkeeping and accounting. In accounting, the range of responsibilities and the scope of the job is much wider. Accountants are responsible for setting up the system that bookkeepers use. The tasks you perform on the job are less mechanical in nature and are varied. Once you set up the system so that the bookkeeper will not be overburdened with work, your job will be to monitor this system to ensure that it is functioning properly. As an accountant, you will need to have knowledge of the bookkeeping system and duties so that you can supervise those working in that capacity.

Another difference between bookkeeping and accounting exists in the possibilities for advancing in the accounting industry. Accountants can advance through the corporate ladder to become senior officials in the company with decision-making authority. They can also branch out into other aspects of the industry such as auditing, investigation of fraud, management and government accounting. Bookkeepers can also advance through the levels of the job but in order to do more challenging accounting work, they need an undergraduate degree.
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