What Is the Difference Between Accounting and Bookkeeping?

In this blog, you will learn: 

• An introduction to bookkeeping and accounting
• What bookkeeping is
• What bookkeeping involves
• What accounting is
• What accounting involves
• What the main differences between accounting and bookkeeping are
• What the latest accountant jobs and bookkeeper jobs available at Spencer Clarke Group are

In the accounting world, there is a variety of jobs you can get with an accounting degree. However, the similar responsibilities of some branches of bookkeeping can make it difficult to properly differentiate between them. 

To better understand the difference between accounting and bookkeeping, we’ve covered everything you could need to know in our latest guide. 

Bookkeeping and accounting - an introduction

Within the accountancy and finance sector, there are a lot of job roles that tend to overlap as a result of relatively similar responsibilities. However, it is important to distinguish between accountancy and bookkeeping as they are, in fact, fairly different despite working relatively closely.

The basic distinction between these two job roles is that bookkeeping involves collecting data and ensuring this is kept accurate, while accountancy involves the presentation of this information in a more subjective manner to offer businesses advice.

What is bookkeeping?

Bookkeeping is the maintenance of a company’s transactions to ensure that all the money that comes and goes from a business is tracked accurately. A key aspect of this job is collecting all of this data and translating it in an easy-to-understand way. As a result, these well-kept documents enable Accountants to complete their duties effectively.

A Bookkeeper is responsible for keeping a record of a business’ expenses and sales in the form of a general ledger. The process of keeping a ledger up to date is known as posting, where a ledger is posted more the more sales that take place. As a large part of the role is managing finer details, a Bookkeeper needs to be someone who has excellent attention to detail and can spot small mistakes easily.

What does bookkeeping involve?

The main responsibilities of bookkeeping involve:

• Management of receipts and bills
• Preparation of financial documents and statements
• Completing payroll
• Maintaining general ledgers and subsidiaries
• Creating invoices

What is accounting

Both bookkeeping and accounting concern the specifics and details of finances. However, the difference between accounting and bookkeeping is that accounting involves the interpretation of bookkeeping data to help businesses make better financial decisions. 

By using the general ledger that a bookkeeper produces, an accountant can get a deeper understanding of how the business is operating. As an accountant’s work involves the analysis of finances for the benefit of a business, having a solid understanding of the cash flow and profitability of a business is a core component of the job.

An Accountant will need strong numeracy skills as their role involves numbers just the same as a Bookkeeper. However, they will also need strong critical thinking and communication skills, with a stronger emphasis on consultation and advisory duties.

What does accounting involve?

As an Accountant, these are the tasks that are typically involved with the role:

• Analysing a business’ costs of operating
• Working with the business owners to go through financial decisions carefully
• Finalising income tax returns
• Putting together forecasts, business trends and growth opportunities
• Verifying records and other data

What is the difference between accounting and bookkeeping?

The main differences between accounting and bookkeeping are

Scope

Bookkeeping is focused on the daily recording and organising of financial transactions, such as sales, purchases, receipts, and payments. Accounting involves a more comprehensive analysis and interpretation of financial data, such as preparing financial statements, analysing financial performance, and providing financial advice.

Timing

Bookkeeping is typically done on a daily or weekly basis, whereas accounting is done at regular intervals such as monthly, quarterly, or annually.

Level of expertise

Bookkeeping requires a basic understanding of accounting principles and knowledge of software tools to record financial transactions. Accounting, on the other hand, requires a higher level of expertise in financial analysis, tax planning, and strategic decision-making.

Responsibilities

Bookkeepers are responsible for recording and organising financial data accurately and efficiently. Accountants are responsible for interpreting and analysing financial data, preparing financial statements, and providing financial advice to help the business make informed decisions.

If you’re searching for your next accountant job, why not take a look at all the vacancies currently available at Spencer Clarke Group? 

Latest accountant and bookkeeping jobs at Spencer Clarke Group

If you’re searching for your next accountant job or bookkeeper job, why not take a look at all the vacancies currently available at Spencer Clarke Group? 

We work with some of the most prestigious accountancy practices across the UK, offering positions with desirable work-life balances and market leading salaries & benefits. 

Can’t find what you’re looking for? Why not upload your CV or contact our accountancy specialist, Lauren Bailey, to discover more about upcoming opportunities.

Meet Lauren Fisher

Who is Spencer Clarke Group? 

Established in 2017, we’re an award winning and progressive recruitment agency based in the heart of the North West. Our reputation is built on trust, expertise and an unwavering commitment to exceed expectations.