Accounting and bookkeeping are two closely related fields, but there are essential distinctions between them. Accounting is the process of recording and organizing financial data, as well as interpreting and presenting it to business owners and investors. It is more transactional and administrative, and is concerned with recording financial transactions. Accounting is also more subjective, providing information about the financial health of a company based on accounting information. Bookkeeping, on the other hand, is the process of maintaining and recording all financial transactions in a company's original books.
It is a more detailed process that requires an understanding of the day-to-day financial transactions of a company. Bookkeepers must be comfortable learning new technologies, as most bookkeeping is done with computerized accounting software and programs. Both accounting and bookkeeping help companies assess their value and make future decisions. However, accounting offers lower barriers to entry than bookkeeping, and the competition for employment is less fierce. Accountants who excel at their jobs may be promoted to accounting positions even if they lack the level of education that the company usually prefers. Accountants make sure that small pieces fit correctly into place, while accountants use those small pieces to draw much more meaningful and comprehensive conclusions.
This makes accounting a more high-level process than bookkeeping, as it requires an understanding of financial data collected by an accountant or business owner to produce financial models. In conclusion, accounting and bookkeeping are both important processes for businesses to understand in order to assess their value and make future decisions. While both require many of the same skills and attributes, there are significant differences in the work done in each career and the work needed to be successful.