What Is the Difference Between Accounting and Bookkeeping?


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.