Although people often confuse and use the terms “accounting” and “bookkeeping” interchangeably, they actually refer to distinct roles within the financial sector. They both play an essential part in ensuring that a business stays financially healthy, but the roles and abilities involved differ. If you’re interested in a career in this area, it’s important to know the differences so that you can see where you can best use your interests and strengths.
What Is Bookkeeping?
Bookkeeping refers to maintaining proper day-to-day financial records. A bookkeeper makes sure that all transactions are well recorded; hence, businesses are always aware of where their money goes. Examples of everyday bookkeeping activities are
- Documenting sales, purchases, receipts, and payments
- Balance bank accounts
- Administering salary and personnel files
- Invoicing and monitoring invoices
- Keeping books and records
Bookkeeping involves the need to be meticulous and consistent. It is the basis of financial reporting, and it is the basis of businesses being able to monitor performance.
What is Accounting?
Accounting elevates the management of financial records to a new level. It encompasses the field of financial services focused on structuring and condensing financial information for both companies and individuals. An accountant is a skilled expert tasked with managing and analyzing financial documentation. Here are the basic accounting functions:
- The preparation of financial statements and budgets
- Evaluation and trends of financial information
- Performing accuracy and compliance audits
- The handling of tax preparation and filing
- Financial strategy advice and financial planning
Accounting involves critical thinking, problem-solving, and effective communication. Bookkeeping answers the question of what happened, whereas accounting answers the questions of what it means and what to do next.
How Accounting and Bookkeeping Fit Together
Bookkeeping and accounting, while interconnected, serve distinct roles within the financial management field. Bookkeepers capture details, and accountants use the same information to make decisions. Accounting would not have any reliable data without bookkeeping. The data contained in bookkeeping would not be utilized to facilitate business growth without accounting.
In small businesses, a single individual can do the two functions. Larger organizations tend to separate the roles but make them work closely together.
Accounting Jobs vs. Bookkeeping Jobs: Key Skills
Both accountants and bookkeepers need basic computer skills and understanding of financial concepts. Beyond that,
Accounting Job Skills
To thrive in the accounting profession, individuals need to combine some number-crunching ability with problem-solving skills. Being an accountant is less about math than it is about strategic, analytical thinking and communication ability.
Bookkeeping Job Skills
Bookkeeping is all about meticulous attention to detail. Bookkeepers need to be able to parse and enter data accurately and consistently. Errors can be costly, both in direct financial terms for the business and in terms of the time needed to correct them later.
Choosing the Right Path
Selecting between a career in bookkeeping and accounting is a significant decision that depends on your personal career goals and strengths. If you thrive in structured environments and enjoy meticulous, detail-focused tasks, bookkeeping could be the ideal path for you. Alternatively, if you are drawn to numerical analysis, strategic planning, and providing financial advice, a career in accounting may align more closely with your interests. Pursuing training in both fields can give you more career options in case you want flexibility.
Training for Jobs in Accounting at ICT
The Accounting and Professional Business Applications program at ICT gives you the skills to start a career in finance and the fundamental groundwork of knowledge you’ll need to advance. Take the first step towards a stable and rewarding business career today. Enroll or reach out to us and find out more about the program.