The terms bookkeeping and accounting are often confused and sometimes used interchangeably. Webster’s Online Dictionary defines a bookkeeper as a person who records the accounts or transactions of a business, and an accountant as one who is skilled in the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. Maybe it is fair to say accounting goes beyond bookkeeping in its scope of tracking the financial results of an operation.
I know personally, I took a bookkeeping class in high school and came away with what I would consider sufficient knowledge to get a job keeping a set of financial records for a business, and a desire to study accounting in college. Let’s just say that accounting in college went well beyond what I learned in bookkeeping. Still the basis of my accounting skills, always went back to what I learned in bookkeeping. In fact, I sometimes wonder why bookkeeping is not a required course for all business majors and especially for anyone studying accounting. A bookkeeper should be able to create accurate records of the financial transactions in a business. The accountant should then be able to take those records and understand what the information means to the business and then summarize and report that information.
Granted, in today’s world most bookkeeping tasks have become highly automated. There are great tools like Outright.com, that simplify the mechanical functions of bookkeeping for both business owners and bookkeepers. Accounting has always been intended to understand the much broader picture of what is going on financially with a business and even be more forward looking to strategically plan where a business is headed. All the analysis that accountants do still is based on someone having done a good job with the bookkeeping, so that you have reliable information to work with from the beginning. Webster’s misplaced the adjective skilled in their definitions, because bookkeeping is an exceptional skill and the critical part of running your business.
