Is there a difference between bookkeeping and accounting? The short answer is yes, though there are similarities, so you would be forgiven for thinking they’re one and the same.
Both accountants and bookkeepers work with financial data, the difference between the two lies in the way in which they work with this data. A bookkeeper primarily concerns themselves with the recording of financial transactions. An accountant, on the other hand, is focussed on classifying, analysing, reporting and summarizing financial data. Essentially, an accountant is responsible for drawing conclusions, these conclusions can then be used by business owners and managers to make key business decisions.
No formal qualifications are required to be a bookkeeper, though a good bookkeeper would certainly benefit from having a basic understanding of accounting. To be an accountant however you need to at least have an AAT qualification which can take 2-3 years, or to become a chartered accountant you need ACCA, ACA or CIMA which can take another 3-4 years.
Accountants are qualified to deal with the entire accounting process, while bookkeepers are qualified to deal with recording financial transactions, they effectively create the data for the accountants to analyse. The key difference between accounting and bookkeeping is that accounting involves interpreting and analysing data and bookkeeping does not.
To conclude, the role of an accountant is very different from that of a bookkeeper, but they work very closely together. Bookkeepers need accountants to give their data meaning and accountants need bookkeepers to give them the data in the first place. Real value is achieved when they work together.
