Bookkeeping involves recording basic accounting transactions such as recording invoices from suppliers, paying suppliers, processing payroll and recording cash received from customers. Bookkeeping is a subset of accounting. Accounting is usually more involved and includes activities such as creating financial statements, creating budgets and compiling tax returns.
A bookkeeper may have a lot of experience but may lack formal accounting training. Accountants typically work in a specific function, while bookkeeping is more broad-based. Accountants for mid-sized to large businesses set up procedures that are then followed by bookkeepers. Bookkeepers do mechanical procedures, but accountants design them. A small business might only need a bookkeeper for its accounting, but larger businesses typically have at least one accountant.