How to Differentiate Accounting From Bookkeeping

Understanding the different roles of those operating your business is crucial to running a successful business. Accountants and bookkeepers alike will tell you there is a large difference between what they do, and often they draw the line at performing tasks where the other's duties begin.

Instructions

How to Differentiate Accounting From Bookkeeping

1. Look for the person who is taking care of the general ledger. The bookkeeper is the individual who keeps track of money coming into a business and money going out. The bookkeeper keeps the ledger.

2. Notice who is taking care of the overall financial statements. Accountants compute a business's financial statements, balance sheets, profit and loss statements, statement of cash flows and the income statements.

3. Note the degrees of those doing the bookkeeping and those doing the accounting. Bookkeepers simply need to know some basic math to keep track of money coming in and money going out. Those doing accounting in many cases have to have degrees to perform their duties.

4. Learn the different types of accountants. There are tax accountants, business accountants and certified public accountants. It is typically one of these individuals who is performing accounting duties for a company.

5. Watch who is submitting documents to the SEC for review. A company's bookkeepers are not allowed to legally submit documents to the SEC. A company's accountants need to certify the documents to submit such forms.

Resources

• Bureau of Labor Statistics
• Accounting coach