Accounting and bookkeeping are both essential business functions that are required for every type of business. Auditing is the process of recording all daily financial transactions whereas accounting is the process of classifying, interpreting, analyzing, summarizing, and reporting critical financial data. The most significant difference between bookkeeping and accounting is that a bookkeeper will typically not be involved in analyzing or interpreting data whereas an accountant will.
The accounting process, as mentioned previously, will involve interpreting, recording, analyzing, classifying, summarizing, and reporting of all financial data of a company or business. Bookkeeping, on the other hand, is simply the payroll process of recording all daily financial transactions. The recording of daily financial transactions, however, is the first part and the beginning of the accounting foundation process. A bookkeeper will handle all of the recording parts of the process whereas an accountant will handle all of the accounting parts of the process.
A bookkeeper will keep and record all pertinent financial transactions in chronological order. He/she will do this on an ongoing daily basis. Today, we see that there are many accounting software programs that can automate many of the bookkeeping processes and therefore a bookkeeper in a small company may also have the responsibility of summarizing and classifying any financial data that is required for producing a financial report. A bookkeeper of this sort may often be referred to as a bookkeeper in full charge. This type of a bookkeeper will make a higher salary than a typical bookkeeper, but their salary will be lower than that of an accountant.
An accountant will have the responsibility of analyzing all of the financial transactions that are in a financial statement or business report. He will do so by following standard accounting principles and requirements. An accountant will interpret and analyze this financial data to make a report on the performance and financial condition of a company or business. He will provide this information to all of the company leaders so that they can make better-informed business decisions.
To the untrained eye, accounting and bookkeeping may appear to be the same profession. After all, both accountants and bookkeepers work with financial data. Each profession will require a basic knowledge of accounting. Bookkeepers who are employed in a smaller company may also handle some of the more basic accounting processes. They may also generate reports and classify financial transactions. They often do not have the education required to do this type of work but since there are many accounting software programs available they can at times provide the accounting information required.
If you would like to pursue a career as a bookkeeper, it is merely a matter of enrolling in a few accounting courses which will help you to understand the basic rules of accounting. To grow an accountant you will need to obtain a bachelor’s degree. You can also become a certified public accountant by pursuing a higher level of education. Both of these careers are excellent choices, and often a bookkeeper can advance to an accountant with further education and training.