Bookkeeping vs. accounting: how are they different?
Bookkeepers and accountants both crunch numbers and monitor monetary inflows and outflows. However, bookkeeping and accounting differ in their objectives and complexity. Explore the details in this comparison.
What is bookkeeping?
Bookkeepers record the financial transactions a business makes in its daily operations. Key bookkeeping tasks include:
- Tracking incoming and outgoing payments
- Reconciling bank statements
- Managing invoices
- Processing payroll
Bookkeepers also update accounting documents and monitor cash flow to ensure the business can meet its financial obligations.
What is accounting?
Accounting takes a broader view of an organization's financial standing. It involves bookkeeping but goes well beyond it to also consider:
- Financial and strategic analytics
- Taxation and reporting
- Organizational assets, liabilities, and their bottom-line impacts
Accountants also ensure their employer complies with all applicable financial disclosure and reporting requirements.
What's the difference? Bookkeeping vs. accounting
Bookkeepers generally do not need as much specialized education. While many hold accounting degrees, you can become a bookkeeper with a postsecondary certificate or high school diploma and on-the-job training.
Meanwhile, most accountants hold at least a bachelor's degree in accounting, and many hold graduate accounting degrees. You'll need at least a bachelor's to qualify for advanced accounting roles, including certified public accountant (CPA). Established professionals can also pursue accounting executive education or pursue an MBA with an accounting concentration.
Accountants shoulder more responsibility than bookkeepers, which is reflected in their pay rates. According to May 2023 data from the Bureau of Labor Statistics (BLS), accountants earned a median salary of $79,880 compared to $47,440 for bookkeepers.
Notably, the BLS also projects a decline in the bookkeeper job market from 2023–33, while it projects accountant roles to grow by 6% during the same period.
Start your journey in bookkeeping or accounting
If you want to become a bookkeeper or accountant, there's a clear path to follow, and it begins with education. Explore relevant educational opportunities from edX partner providers or learn the basics by taking a free course.