What is the Difference B/W Bookkeeping and Accounting?
                     What is the 
Difference B/W 
Bookkeeping and 
Accounting? 
Bookkeeping involves recording each transaction 
for a business while accounting is more about 
looking at all those transactions to find trends that 
can be used to help a company. More specifically, 
bookkeeping is done with paper records, while 
accounting requires software programs.
Bookkeepers record each transaction in a company’s 
financial. Accounting is more subjective, giving you 
insights into your business’s financial health based on 
bookkeeping information.
Accounting and bookkeeping are two related fields with 
some differences in functionalities. Understanding 
these differences is important because the roles of 
accountants and bookkeepers differ based on their 
respective skill sets, expertise, knowledge base or 
background experiences (e.g., accounting vs finance). 
In this guide, we will explain the functional differences 
between accounting and bookkeeping. We will also 
discuss the distinct roles of a bookkeeper versus an 
accountant.
The function of bookkeeping 
The role of a bookkeeper is to record and detail the 
business transactions that affect any aspect of your 
business (e.g., revenue, expenses, payroll, inventory). 
You can think of a bookkeeper as someone who records 
the basic transactions happening in a business — not 
much beyond recording them. Bookkeepers typically 
handle routine day-to-day ledger maintenance. The 
general ledger is a basic document where a bookkeeper 
records the amounts from sale and expense receipts. 
This is referred to as posting.  The general ledger is a 
summarised list of all amounts.
The function of accounting
Accounting is a high-level process that uses financial 
data compiled by a bookkeeper or business owner to 
produce financial models, reports, and analyses. The 
main goal of accounting is to provide useful information 
to managers, investors, tax authorities, customers, 
suppliers, employees etc. Accountants can also offer 
advice on business decisions based on analyses derived 
from financial data in addition to providing regulatory 
compliance for businesses (e.g., accounts are retained 
for a certain number of years). 
A financial statement serves as the basis for making 
business decisions and helps monitor performance. 
Accountants gather, organise, and summarise 
transactions, then draw conclusions based on that 
information. Accountants analyse past performances to 
make better business decisions in the future. They 
compare their findings with past performance and 
Analysing costs of operations and Completing income 
tax returns.
The roles: bookkeeper vs accountant 
Bookkeepers record the amounts from sales and 
expense receipts. They keep track of financial 
transactions in journals, ledgers, and computer 
programs. Accountants combine information from 
several sources to draw conclusions about a company's 
performance. They collect relevant data that is then 
analysed before drawing conclusions or giving advice. 
Typically, bookkeepers are not required to have any 
formal education. To be successful in their work, 
bookkeepers need to be sticklers for accuracy, and 
knowledgeable about key financial topics. Accountants, 
on the other hand, need a bachelor’s degree in 
accounting or finance from an accredited university. 
Additionally, they must get a professional license from 
their state to operate as accountants.
Although your business may have both a bookkeeper 
and an accountant on staff, their job duties are quite 
different. 
Here are the major pointers. 
Bookkeeper
• Recording and categorizing financial transactions
• Posting debits and credits
• Producing and sending invoices
• Maintaining and balancing subsidiaries, general 
ledgers, and historical accounts
• Completing payroll
• Record keeping
Accountant
• Preparing adjusting entries
• Preparing financial statements
• Completing income tax returns
• Financial analysis and strategy
• Tax strategy and tax planning
• Financial forecasting
iKeep Bookkeeping & Hall Chadwick
Organised financial records and perfectly balanced 
finances produced by the bookkeeper, coupled with 
smart financial strategy and accurate tax filing by the 
accountant, contribute directly to the long-term 
success of every business. iKeep bookkeeping with its 
partner firm Hall Chadwick, offers services ranging from 
bookkeeping, accounting, compliance solutions, to 
financial planning and strategy. Find out more at 
www.iKeep.com.au