Bookkeeping vs. Accounting: What’s the Difference?

Bookkeeper vs. Accountant

You might wonder how bookkeeping vs. accounting differs when managing a business’s accounting. While they are overlapping disciplines, there are some key differences. Bookkeepers are chiefly responsible for accurately recording and organizing transactions, while accountants add value by synthesizing that information into actionable insights and financial projections. 

In other words, bookkeepers are tacticians, and accountants are strategists. 

This article will help you decide when and if you need to bring one of these professionals on board in your business. 

As you scale your business, indinero’s online bookkeeping and accounting services are here to support you. We’ll handle the financial details at a fraction of the cost of a full-time employee so you can focus on growing your operation. 

What Does a Bookkeeper Do? 

Bookkeepers track and organize business transactions. You’re probably familiar with the duties; most small business owners have acted as their own bookkeepers at some point.

After a business chooses a legal entity, such as an LLC or sole proprietorship, bookkeepers segregate personal and business financials and implement a method for tracking business expenses. Since every expense is a potential business tax deduction, bookkeepers have strong attention to detail and aim to record and categorize every transaction accurately. 

Entrepreneurs may choose the DIY route at first, perhaps beginning with a simple spreadsheet. As a business grows, a professional bookkeeper will use software that automatically records and organizes cash flowing in and out of business accounts. 

Bookkeeping vs. Accounting

The above is a general overview of what bookkeepers do, but here’s a list of other common duties performed by bookkeepers: 

  • Maintaining the general ledger
  • Transaction tracking
  • Reconciling Accounts
  • Payroll
  • Managing Accounts Receivable and Payable 
  • Financial Record Keeping
  • Budgeting

What Does an Accountant Do? 

Contrary to popular belief, accountants do much more than maximize tax deductions. They can certainly keep the books, file taxes, and maintain legal compliance, but they also use creativity and strategy to think about the big picture of a business. 

Using the work of a bookkeeper as a foundation, accountants generate various financial statements to illuminate a business’s recent trends and current financial state. From there, they project what-if scenarios into the future, guiding business owners to grow and present themselves to investors and creditors.

business reports

Here’s a list of common duties performed by accountants: 

  • Financial Reporting
  • Analysis 
  • Budgeting and Forecasting
  • Tax Planning
  • Compliance
  • Audit Support
  • Financial Planning and Strategy
  • Risk Management

What Is the Difference Between a Bookkeeper vs. Accountant?

Aside from the duties we’ve outlined above, there are other important accounting vs. bookkeeping distinctions to note. 

Bookkeeping is chiefly administrative, involving transactions, budgeting, and routine documentation. 

In contrast, accounting is more creative and interpretive, offering entrepreneurs valuable data-driven insights in addition to the role of a bookkeeper. 

Education Level: Bookkeepers

No certification is necessary to be a bookkeeper. However, some may acquire licenses and certifications to enhance their education and value. Both the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) offer such certifications.

To earn the Certified Public Bookkeeper License, professionals must have 2,000 hours of work experience, pass an exam, and take 24 hours of continuing education each year.

Education Level: Accountants

In contrast to bookkeepers, accountants must have, at minimum, a bachelor’s degree.

There are several accounting certifications to obtain as well. For example, Certified Public Accountant (CPA),  Chartered Financial Analyst (CFA), and Certified Internal Auditor (CIA) licenses are common in the field.

CPA Requirements 

  • Meet state-specific requirements
  • Pass the Uniform CPA exam
  • Renew every 1-2 years

What Do Bookkeepers and Accountants Charge?

The Bureau of Labor Statistics reports a median annual wage of $45,860 for bookkeepers and $77,250 for accountants, or $22 and $37 an hour, respectively. You can expect to pay roughly these amounts for an in-house team member. 

If you choose online bookkeeping services, costs depend on project complexity, the amount of manpower required, and the markup charged by service providers. To better understand how much an outsourced accountant or bookkeeper might cost, book a free consultation with one of indinero’s experts.

Signs Your Business Could Benefit From Hiring Help

Startup businesses often save money early on by having one person take on multiple roles. But there comes a time when that approach can hobble growth; a generalist can do many jobs well, but a specialist can do a single job exceptionally. 

Here are the signs it’s time to hire help. 

Overwhelming Workload

Entrepreneurs go into business for a variety of reasons: passion for the industry, the call to freedom, self-determination, and more. But what nobody tells you is just how many different jobs will be your responsibility. 

It’s possible to take on more work for a period of time, but entrepreneurship is a marathon, not a sprint. If tasks are piling up and meeting deadlines is becoming challenging, outsourcing can provide much-needed relief. 

Decline in Quality

Quality should never be compromised for the sake of quantity. If you notice a decline in the quality of your products or services due to stretched resources, outsourcing can help maintain high standards.

Limited In-House Expertise

Most entrepreneurs can and do learn skills on the job. But sometimes, the time spent managing a learning curve isn’t worth the cost savings. For instance, an expert accountant could spot tax deductions and other savings that someone less practiced might not notice.

If your business lacks in-house expertise, outsourcing becomes a strategic move to access skills not readily available internally.

Note: The section below does not apply to individuals owed a refund. For more information on tax penalties for individuals, review this page from the IRS

Common Misconceptions About Accounting vs. Bookkeeping

Bookkeeping and accounting are not the same; they form a symbiotic relationship. The success of one is intertwined with the effectiveness of the other.

Myth: Bookkeeping and Accounting are Interchangeable

While interconnected, the roles of an accountant vs. bookkeeper differ in scope and purpose. Bookkeeping is a subset of accounting, focused on data entry, while accounting encompasses a broader spectrum of financial analysis and reporting.

Myth: Technology Makes Bookkeeping and Accounting Obsolete

Technology enhances efficiency, but human expertise is still valuable. Automated processes can’t replace the critical thinking and strategic insights of skilled professionals. Beyond that, AI applications like ChatGPT are known for “hallucinating” information, and any machine-generated inaccuracies could be devastating for your business.

Myth: Small Businesses Don’t Need Accounting or Bookkeepers

Regardless of size, businesses benefit from accounting and bookkeeping. These services provide roadmaps for growth and resource allocation and can help maximize tax deductions at the end of the year. 

That said, as cash flow and profits grow, small businesses can benefit from any number of investments. It’s impossible to say where exactly bookkeeping or accounting services fall on a list of priorities, but the more effectively a business owner delegates essential operations, the more rapidly they can scale. 


Bookkeeping and accounting are overlapping yet distinct professions. Bookkeepers act as on-the-ground tacticians maintaining accurate records, while accountants act as strategists crafting plans for the future. 

With so many competing priorities, it’s impossible to say when a business needs to engage professional help. But when you feel the time is right, indinero’s expert team is here to help.

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