Bookkeeping vs. accounting: how are they different? | edX

Bookkeeping vs. accounting: how are they different?Written by: James M. Tobin, Edited by: Marie Custodio CollazoPublished: January 31, 2025Bookkeepers 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 paymentsReconciling bank statementsManaging invoicesProcessing payrollBookkeepers 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 analyticsTaxation and reportingOrganizational assets, liabilities, and their bottom-line impactsAccountants also ensure their employer complies with all applicable financial disclosure and reporting requirements.What's the difference? Bookkeeping vs. accountingBookkeepers 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 accountingIf 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.FAQs about bookkeeping vs. accountingIs it better to be a bookkeeper or an accountant?It depends on your goals and priorities. Accountants earn more money on average and have higher near-term job growth prospects. However, bookkeepers do not need as much education and face fewer barriers to entry.What can an accountant do that a bookkeeper can't?Accountants often work alongside senior managers and executives, providing analytical and strategic insights that can improve the organization's financial standing. Bookkeepers do not typically perform these functions and instead concentrate solely on tracking and recording financial transactions. Can a bookkeeper be called an accountant?While bookkeepers and accountants have different scopes of practice, some bookkeepers market themselves as accountants. However, they cannot claim specific titles, such as the CPA designation, without certification or licensure.Should I be a bookkeeper or an accountant?It depends on your professional objectives and personal preferences. Accountants must complete more schooling and training and meet higher standards to qualify for licenses and certifications. However, they also earn more money and have stronger job growth prospects, according to the BLS. For further insights, consult this resource on the value of an accounting degree.Skill DevelopmentCareerBusinessShare this articleShare on FacebookShare on XShare on LinkedinShare on Email