When starting out in business it’s tempting to forgo some business essentials, such as keeping financial records, however, when it comes to tax time it’s going to be hard work to dig up the receipts and invoices necessary for reporting. It’s not up to an accountant to keep up with your daily transitions, although they can do this task if you request them ahead of time. The best way forward is to have Outsourced Bookkeeping services. This article will explain the separate identities of accounting and booking and how they work together.

What is bookkeeping?

Bookkeeping is a system for recording daily financial transactions in a general ledger. While anyone can manage business bookkeeping, to be successful it’s important that all financial transitions in and out of the business are recorded in a consistent way. Recordings are done as close to the transaction time as possible so any errors can be identified and fixed.

What is accounting?

Accounting is a professional process that uses spending and income data to create financial reports, advice and solutions. Accounting can include analysing operation costs, completing tax returns and helping to understand financial impacts on the business as a whole.

Main differences between accounting and bookkeeping

Both systems work with numbers but there are several main differences between accounting and bookkeeping to be aware of: 


For bookkeeping the task is to keep a general ledger of all money movements into and out of a company. This enables accurate record keeping and a chance to fix any issues with invoices and bank reconciliations in real time.

As well as preparing and lodging loan applications and tax returns the key task of accounting is the creation and analysis of financial reports. These insights help business stakeholders make informed business decisions.


The bookkeeping process focuses on administration. It’s about gathering and maintaining consistent and accurate records. Accounting is more subjective, providing insights and analysis into a company’s financial health using bookkeeping information as a basis for advice and recommendations.

Decision making

Bookkeeping alone can’t assist in making informed purchasing decisions or setting budgets as it’s too focused on daily events. Only the analysis through accounting reports that looks at spending and income over a period of time can help with decision-making and financial problem-solving.

Preparation of financial statements

While the data from bookkeeping is essential for creating reports, only accounting methods can prepare financial statements and provide intelligence about best practices.


Most accountants have bookkeeping abilities but spend their time focusing on the bigger picture of analytics and reporting. Bookkeeping itself does not require any analysis or interpretation, which can only be done when a wider range of data is taken into account and professionally assessed.


Bookkeeping has two main types, single entry and double entry. Double-entry bookkeeping is the only one that can provide information for accounting reports. Accounting has types with different laws accountants are well versed in, including tax, business finance, management accounting and audits.

Skills and credentials

Booking work needs to be accurate and consistent and will require a commitment to the task. No particular skill is required but certificate studies are available. In most cases bookkeeping work will be overseen by an accountant.

Accounting requires a much deeper knowledge and understanding of finances which is obtained through a bachelor of accounting. The complexity of these tasks can be significantly reduced with a NetSuite ERP Implementation, which is designed to integrate and streamline all aspects of your business’s finances. 

Benefits of using an accountant or bookkeeper

There are a number of benefits to hiring a professional bookkeeper and accountant.

  • Accurate records of all transactions to hold you accountable for spending and income needs
  • Smooth, accurate and timely tax lodgements
  • Historical financial data you can use to perfect reports and provide comparisons
  • Better decision-making ability based on real-time information
  • Outsourcing ensures accurate results and frees up your staff for other tasks

Hiring an accountant gives you far more than just record keeping. Their skills and credentials will be used to analyse the data provided by bookkeepers in a way that can bring financial and systemic benefits to your business. To be able to hand the most accurate and reliable data over to an accounting department you’ll need to engage an accredited bookkeeper to handle the ledger and keep your business up to date.