Accounting and Bookkeeping: What’s the difference?

The terms “accountant” and “bookkeeper” are murky. Sometimes, even accountants and bookkeepers aren’t sure what makes them distinct! The two professions overlap significantly, but generally speaking, accountants are trained to perform bookkeepers’ tasks and take on additional responsibilities. Many people begin their careers as bookkeepers and advance by earning an accountancy degree.

A bookkeeping cycle includes eight steps from transactions to closing the books, and accountants are formally qualified to perform all eight of them. However, in a large firm, usually the bookkeepers actually perform most of the tasks, and an accountant reviews their work. Lower-level bookkeeping clerks might only be trained to perform one or two steps – essentially data entry – but full-charge bookkeepers may perform seven of the steps.

The early bookkeeping steps involve recording and posting transactions. Periodic checks are then made of the balance. These steps may all be completed by lower-level bookkeepers. If there are discrepancies, an accountant or mid-level bookkeeper uses a worksheet to sort out the problem. Toward the end of the bookkeeping cycle, a full-charge bookkeeper or accountant makes financial reports. It’s an accountant’s job to interpret the financial reports and present his or her analysis to business management.

Thus, whereas bookkeepers generally perform repetitive tasks and follow a clear set of steps, accountants work as supervisors and take on more subjective tasks in order to make recommendations to executives.