{"id":6233,"date":"2019-11-11T11:30:04","date_gmt":"2019-11-11T16:30:04","guid":{"rendered":"https:\/\/www.goodwin.edu\/enews\/?p=6233"},"modified":"2024-12-17T17:16:17","modified_gmt":"2024-12-17T22:16:17","slug":"bookkeeping-vs-accounting","status":"publish","type":"post","link":"https:\/\/www.goodwin.edu\/enews\/bookkeeping-vs-accounting\/","title":{"rendered":"Bookkeeping vs. Accounting: What\u2019s the Difference?"},"content":{"rendered":"

Accounting and finance are two of the most in-demand skills in the business world today. They are also two of the most sought after college degrees by employers, according to U.S. News<\/a>. But did you know there are many facets of accounting and finance, and many different degrees and specializations you can pursue within the field? Two of the most common college programs, for example, are accounting <\/strong>and bookkeeping. <\/strong><\/p>\n

If you are considering a future in accounting, you may be wondering which number-crunching career is right for you. You may also be questioning the difference between the two.<\/p>\n

While\u00a0bookkeepers and accountants\u00a0share some common goals and tasks, they support businesses in\u00a0different ways and at different stages of the financial cycle. They also vary in responsibilities and career outcomes. Let\u2019s start with the basics.<\/p>\n

What is Accounting?<\/strong><\/h2>\n

Accounting is how a business interprets, organizes, and processes its financial information. As a profession, accounting is a field completely dedicated to assessing a business\u2019 financial health, and carrying out its financial tasks \u2013 reviewing assets, organizing data, measuring profits and cash flow, and understanding how and where to build value within an organization. All types of businesses need accounting professionals to run smoothly and properly.<\/p>\n

What is Bookkeeping?<\/strong><\/h2>\n

Bookkeeping is a part of, and one of the first steps in, the accounting process. It involves managing and recording the day-to-day financial transactions of a business. Bookkeepers can be found updating spreadsheets, reconciling bank statements, processing payroll, creating invoices, and making payments. Ultimately, the goal of bookkeepers is to ensure financial records and transactions are systematic.<\/p>\n

What\u2019s the Difference Between a Bookkeeper and Accountant?<\/strong><\/h2>\n

Accounting is a high-level field, while bookkeeping is a specialization within the accounting profession. Bookkeepers handle one part of the accounting process, while accountants manage it all.<\/p>\n

Bookkeepers lay the foundation for accountants. They record a business\u2019 financial transactions and data. Accountants then take the data produced by bookkeepers and report on it. Accountants analyze the numbers and turn them into a bigger-picture report of the business\u2019 financial state. In this sense, bookkeepers are the story-writers, and accountants are the story-tellers. Bookkeepers handle the operational side of accounting, while accountants and accounting assistants are more responsible for analyses, financial consulting, strategic planning, and forecasting.<\/p>\n

Bookkeeping vs. Accounting Careers<\/strong><\/h2>\n

Accounting professionals \u2013 such as bookkeepers \u2013 are needed in every business. They may work for accounting firms, where they have clients, or for individual companies and organizations. While accountants and bookkeepers may work together in the same office, bookkeepers may also work alone and on their own schedule. Often, small businesses will hire part-time or freelance bookkeepers to handle payroll, invoicing, and other financial tasks, rather than hiring a full-time accountant for the job.<\/p>\n

Bookkeeping vs. Accounting Career Paths<\/strong><\/h2>\n

At a high-level, there are many career paths within the accounting field. Each career path has different education and credentialing requirements. For example, most accountants are required to have at least a four-year, bachelor\u2019s degree in accounting. Certified Public Accountants must also pass a rigorous, four-part exam before becoming licensed in the field. Meanwhile, accounting assistants, payroll professionals, and bookkeepers need a foundational education in accounting in order to launch a career.<\/p>\n

If you are considering an accounting career, some of the many career options include:<\/p>\n