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Bookkeeping vs. Accounting: What’s the Difference?

Accounting and finance are two of the most in-demand skills in the business world today. They are also two of the most sought after college degrees by employers, according to U.S. News. But did you know there are many facets of accounting and finance, and many different degrees and specializations you can pursue within the field? Two of the most common college programs, for example, are accounting and bookkeeping.

If you are considering a future in accounting, you may be wondering which number-crunching career is right for you. You may also be questioning the difference between the two.

While bookkeepers and accountants share some common goals and tasks, they support businesses in different ways and at different stages of the financial cycle. They also vary in responsibilities and career outcomes. Let’s start with the basics.

What is Accounting?

Accounting is how a business interprets, organizes, and processes its financial information. As a profession, accounting is a field completely dedicated to assessing a business’ financial health, and carrying out its financial tasks – reviewing assets, organizing data, measuring profits and cash flow, and understanding how and where to build value within an organization. All types of businesses need accounting professionals to run smoothly and properly.

What is Bookkeeping?

Bookkeeping is a part of, and one of the first steps in, the accounting process. It involves managing and recording the day-to-day financial transactions of a business. Bookkeepers can be found updating spreadsheets, reconciling bank statements, processing payroll, creating invoices, and making payments. Ultimately, the goal of bookkeepers is to ensure financial records and transactions are systematic.

What’s the Difference Between a Bookkeeper and Accountant?

Accounting is a high-level field, while bookkeeping is a specialization within the accounting profession. Bookkeepers handle one part of the accounting process, while accountants manage it all.

Bookkeepers lay the foundation for accountants. They record a business’ financial transactions and data. Accountants then take the data produced by bookkeepers and report on it. Accountants analyze the numbers and turn them into a bigger-picture report of the business’ financial state. In this sense, bookkeepers are the story-writers, and accountants are the story-tellers. Bookkeepers handle the operational side of accounting, while accountants and accounting assistants are more responsible for analyses, financial consulting, strategic planning, and forecasting.

Bookkeeping vs. Accounting Careers

Accounting professionals – such as bookkeepers – are needed in every business. They may work for accounting firms, where they have clients, or for individual companies and organizations. While accountants and bookkeepers may work together in the same office, bookkeepers may also work alone and on their own schedule. Often, small businesses will hire part-time or freelance bookkeepers to handle payroll, invoicing, and other financial tasks, rather than hiring a full-time accountant for the job.

Bookkeeping vs. Accounting Career Paths

At a high-level, there are many career paths within the accounting field. Each career path has different education and credentialing requirements. For example, most accountants are required to have at least a four-year, bachelor’s degree in accounting. Certified Public Accountants must also pass a rigorous, four-part exam before becoming licensed in the field. Meanwhile, accounting assistants, payroll professionals, and bookkeepers need a foundational education in accounting in order to launch a career.

If you are considering an accounting career, some of the many career options include:

  • Accountant or Certified Public Accountant (CPA)
  • Accounting Assistant
  • Accounting Manager
  • Accounts Payable Clerk
  • Accounts Receivable Clerk
  • Bookkeeper
  • Budget Analyst
  • Certified Internal Auditor
  • Chief Financial Officer (CFO)
  • Forensic Accountant
  • Payroll Clerk
  • Tax Accountant

While many of the above accountant careers require a four-year degree, becoming a bookkeeper does not. To become a bookkeeper today, it is recommended you pursue some postsecondary coursework in accounting, such as an associate degree. An associate degree in accounting can be completed in less than two years’ time, and provides the foundational knowledge needed for bookkeeping tasks.

The Bottom Line

No matter the path you choose, know that you will play an important role in your clients’ success. All accounting professionals, from bookkeepers to CPAs, are critical to keeping finances on track and keeping a business running.

If you would like to learn how to launch an accounting career in less than two years, please do not hesitate to reach out to Goodwin College at 1-800-889-3282. Goodwin’s associate in accounting program prepares students for a variety of entry-level accounting careers, and will make you eligible to earn professional certification in bookkeeping. Visit us online to learn more.