December 7, 2020 Bookkeeping en_US Learn the differences between bookkeeping vs. accounting, how they’re similar, and what you need to know to choose the right option for your business. Accounting vs bookkeeping: What’s the difference between a bookkeeper and an accountant?

Accounting vs bookkeeping: What’s the difference between a bookkeeper and an accountant?

By Ken Boyd December 7, 2020

The terms “bookkeeper” and “accountant” tend to be used interchangeably by those unfamiliar with the industry. But there are a few important distinctions between the two professions. When thinking about bookkeeping vs. accounting, it’s important to keep a few things in mind.

A bookkeeper can help you manage your financial books by documenting transactions, managing accounts, and recording financial data. These tasks are collectively called bookkeeping.

An accountant can then use this data to assess the financial health of the business and help you make data-driven business decisions. An accountant can also be a bookkeeper, but an entry-level bookkeeper is not an accountant.

Let’s take a closer look at the differences between the two, and how working with both bookkeepers and accounts can benefit your business.

What is bookkeeping?

Bookkeeping is the art of logging and tracking all financial transactions that a business makes from its opening to its closing. This not only helps to establish the financial outcomes of a business but also sets a standard for accurately documenting where money is being made or being spent. Bookkeepers record transactions based on documentation such as purchase orders, receipts, bills, invoices, or any other reports that indicate a transaction was made.

Bookkeeping can be done in a single-entry or double-entry method. With single-entry bookkeeping, all profits and expenses are logged for all transactions. A double-entry method is more involved and can include certain financial statements, ledgers, and a trial balance. In short, single-entry bookkeeping tracks the basics of a company’s spending and earning, while double-entry bookkeeping tracks additional transactions such as assets, liabilities, and overall company financial health.

Regardless of the type of bookkeeping being done, it’s the recording of the day-to-day business financial transactions and is an integral part of accounting. Luckily, services like QuickBooks Live Bookkeeping make it easy to handle bookkeeping and bring your finances up to date.

What does a bookkeeper do?

A bookkeeper is someone who keeps track of day-to-day business finances. This includes recording transactions and managing general ledgers. They may have a business or bachelor’s degree, but it’s not required. There are plenty of great bookkeepers with years of experience who work effectively without a business degree. Good bookkeepers are organized, skilled with numbers, and fastidious problem-solvers.

Common bookkeeping services and responsibilities include:

  • Recording daily transactions: Reviewing source documents and posting journal entries into accounting software
  • Reconciliations: Reconciling bank accounts and reviewing the general ledger to ensure that financial information is posted to the correct accounts
  • Delivering reports: This includes balance sheet and income statement
  • Closing books: Confirm accuracy by preparing a trial balance and ensuring that they are ready for tax time

Bookkeepers benefit your business by freeing up more time in your schedule, minimizing financial errors, and generating accurate financial reports. Working with a bookkeeper can also help ensure your books stay clean, so you stay ready for tax time year-round.

What is accounting?

Accounting is similar to bookkeeping in that it also involves the process of documenting business financial transactions, but there’s more to it. This is a more in-depth process that involves the summary, analysis, and interpretation of financial data. Accounting also involves reporting these findings to entities such as tax collectors and regulators. It’s a process that tells the financial story of your business, including if your business is profitable or if you’re suffering a loss and what aspects of your business are the most profitable.

It’s important to note that bookkeeping is a foundational aspect of accounting—without the bookkeeping process, the accounting process wouldn’t be possible. This is because the accountant uses the information gathered by the bookkeeper to prepare the larger financial statements and reports.

What does an accountant do?

Accountants use the records bookkeepers provide to assess big picture finances and make smart business decisions. They also provide insights about the company financials to business owners and other stakeholders and give a summary of the overall financial health of the business.

In general, an accountant’s role requires a higher level of expertise and education. Accountants usually hold an accounting degree and are registered as a certified public accountant (CPA). CPAs must pass the CPA exam in order to use that title; this credential is highly valued in the accounting profession.

An accountant’s duties might include:

  • Overseeing a bookkeeper’s work: This is to ensure accuracy and to catch any discrepancies as they arise. This also involves reviewing accounting transactions within the bookkeeping.
  • Managing the bookkeeping process: Accountants make corrections to any clerical errors on the bookkeeping side, as well as forecast company health from these records.
  • Generating financial statements: Accountants make adjustments to the trial balance and generate the income statement, balance sheet, and statement of cash flow.
  • Preparing tax returns: Accountants produce the financial reports required to generate tax returns. Your accountant may produce the tax filings and send them to the IRS or work with a CPA firm that provides this service during tax season.

Most importantly, your accountant is a valued advisor who can help you with important decision-making. If you’re considering purchasing new equipment or taking out a line of credit, for example, your accountant can help you determine the financial ramifications of your decision.

Bookkeeping vs. accounting

Knowing the difference between bookkeeping and accounting can be tricky, especially with the interchangeability of the terms and how the duties can overlap. While they are similar in many ways, there are a few significant differences.

Chart depicting the difference between bookkeeping and accounting


The required credentials of a bookkeeper and an accountant are perhaps the largest difference between the two roles. Individuals aren’t required to have any specific certification or formal education to work as a bookkeeper. They do, however, need to have an understanding of basic and key financial topics and also have an eye for accuracy.

An accountant, on the other hand, will typically need a bachelor’s degree or higher in the field of accounting or finance. Due to the nature of this job, accountants can also attain professional certifications to grow their careers and possibly earn a higher income. While several certifications exist for accountants, the CPA title is one of the most common.

If you already use specific tools to manage your books, you’ll want to discuss those tools with any bookkeepers or accountants you consider working with to ensure they’re familiar with them. For example, working with a QuickBooks Live bookkeeper ensures that you’ll be partnered with a certified QuickBooks ProAdvisor that has been trained, tested and recognized by Intuit as someone that can guide other QuickBooks clients.


As discussed above, the main objectives of accounting and bookkeeping are similar but still different in many ways. For bookkeeping, the primary objective is not only to record transactions but also to scope any fraud or discrepancies. By doing so, bookkeepers can visualize the financial health of the company and resolve issues as they arise.

Accounting has a broader financial scope. While accounting involves the review of financial records that the bookkeeper prepared, it also includes the concept of protecting business properties. By thoroughly analyzing financial records, the accountant can determine if funds are being misused or misallocated. Accountants analyze and report the financial information to all appropriate departments, institutions, and stakeholders within the organization.

Skill sets

Partially due to the required credentials, bookkeeping and accounting require different skill sets for each role. While these skills can certainly overlap, there are some notable differences:

  • Mathematics: While both bookkeeping and accounting include daily basic mathematics operations like addition and subtraction, accounting involves more complex operations such as percentages, ratios, and exponents.
  • Detail: Both accounting and bookkeeping require great attention to detail. Part of a bookkeeper’s job is to ensure that records are documented correctly for the accountant to analyze. Accountants not only need to ensure that the information the bookkeeper provides is correct, but they also need to be able to identify any inconsistencies or issues within the reporting, otherwise the analysis might be incorrect.
  • Problem-solving: Undoubtedly, both disciplines require expert problem-solving skills. While bookkeepers need to be able to find discrepancies within reporting, the accountant might need to be able to resolve the issues themselves and come up with solutions.

Understanding the accounting cycle

Accounting cycle steps

To fully understand the division of responsibilities between an accountant and a bookkeeper, you need to understand the accounting tasks that must be completed. These tasks are part of the overarching accounting cycle, a system every business must follow to generate accurate financial statements. The steps of the accounting cycle are as follows:

  1. Create a chart of accounts (Bookkeeper)
  2. Maintain journal entries and the general ledger (Bookkeeper or accountant)
  3. Generate the trial balance and adjust entries (Accountant)

1. Create a chart of accounts

The chart of accounts is a list of financial accounts and corresponding account numbers needed to manage the business. As your company grows, you may add, subtract, or change the accounts that are used to post transactions. Use the chart of accounts to post every journal entry or financial transaction.

  • Who handles what?: The chart of accounts primarily consists of assets, liabilities, income, and expenses. This step is, for the most part, completed by a bookkeeper.

2. Maintain journal entries and the general ledger

The bookkeeper posts accounting transactions in the general ledger using source documents such as receipts, invoices, and other records of business activity. They also post transactions using journal entries that track all account activities.

A company’s general ledger is a list of every transaction posted to the accounting records during a specific period of time. The general ledger lists every account name and number in the chart of accounts along with every debit and credit entry.

  • Who handles what?: While these steps are usually performed by a bookkeeper, an accountant may step in to complete these tasks, or oversee them as they’re completed by the bookkeeper.

3. Generate the trial balance and adjust entries

Once all transactions are posted, the accountant generates a trial balance that lists all business accounts and balances. A trial balance may require adjustments and corrections using adjusting entries.

Adjusting entry transactions are necessary to comply with the accrual basis method of accounting required by the generally accepted accounting principles (GAAP). Once the adjusting entries are posted, accountants use the updated trial balance to produce financial statements. At the end of each month and year, they close the books and start the process over again.

  • Who handles what?: These steps are typically performed by the accountant as they require a more in-depth understanding and knowledge-base.

Every step in the accounting cycle must be performed at the end of each month and year. Without an accountant or bookkeeper, it’s up to the business owner to accomplish them on their own. A bookkeeper can manage most of these tasks, but an accountant takes them one step further by using the generated financial statements to offer valuable financial advice.

Should you hire an accountant or bookkeeper?

When it comes to hiring an accountant or bookkeeper, the answer will depend on what kind of help you need. Bookkeepers play a vital role in managing financial records, while accountants bring valuable expertise and advice to the table. It’s not uncommon for businesses to work with both a bookkeeper and an accountant, depending on their needs.

No matter which direction you decide to go, one thing is certain: Hiring a bookkeeper or accounting professional is the best way a small business owner can manage growth.

Growing a company requires an increasing number of accounting transactions. You might start your business by handling accounting tasks yourself, then decide to hand off the day-to-day transaction input to a bookkeeper as you grow.

Eventually, your business will require the expertise of an accountant. As you grow, it’s important to invest in professionals who can keep your accounting system on track, free up your time, and help you make better decisions for your business.

QuickBooks Live cta

Consider your options

If you’re not ready to hire a full-time bookkeeper or accountant, you still have a few options. It’s always a good idea to start with bookkeeping software to track income and expenses. But managing your full company finances can still take time and considerable dedication.

You might consider hiring a part-time bookkeeper or working with a contractor to take some basic bookkeeping and accounting tasks off your plate. You can be paired with a team of QuickBooks-certified bookkeepers to help you manage and maintain your books virtually. Your bookkeepers can bring your past books up-to-date and take everyday bookkeeping tasks off your plate with guaranteed accuracy.1

1100% Accurate Books Guarantee: At your request, QuickBooks will conduct a full evaluation of your bookkeeper’s work. If your Live Bookkeeper makes an error that requires you to re-open your books for any month, we’ll correct the error in your books for the month that the error occurred at no additional charge.

Eligible errors include only those made by a Live Bookkeeper. An “error” is: a) a transaction that has been incorrectly categorized to the wrong account; b) an account balance in QuickBooks that doesn’t match the actual account balance; or c) improper transactions which can’t be supported by documentation (including client responses and client meeting notes).

While taking the next step in maintaining your company’s records can seem daunting, there are plenty of options available to help make this task easier for you, so you can stay focused on growing your business.

If you invoke the guarantee, QuickBooks will conduct an evaluation of the Live Bookkeeper’s work. You’ll need to provide QuickBooks with a receipt for the transaction in question, correspondence from your outside tax accountant, or a document stating the balance of the account if an account balance is in question.

Live Bookkeepers aren’t responsible for errors resulting from incorrect information that you provide, or if you re-open the books by overriding closure after a Live Bookkeeper completes the month-end closure.

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Ken Boyd is a co-founder of and owns St. Louis Test Preparation ( He provides blogs, videos, and speaking services on accounting and finance. Ken is the author of four Dummies books, including "Cost Accounting for Dummies." Read more