Bookkeeping vs accounting (comparison)
Bookkeeping and accounting are both important parts of managing your finances. At first glance, the two can seem quite similar, but there are a few main differences.
Bookkeeping focuses on recording and organizing financial data. Accounting is the interpretation and presentation of that data to business owners and investors.
Bookkeeping typically consists of:
payroll
invoicing
receipts and bills
recording business transactions
Accounting typically consists of:
financial statements and reports
budgets
tax returns
analyzing business performance
The tasks that bookkeepers and accountants do vary between businesses. Bookkeepers working for smaller businesses might do some basic accounting duties. There’s often overlap, and the duties may change a lot from one business to another.
See related terms
Handy resources
Advisor directory
You can search for experts in our advisor directory
When you should hire a bookkeeper
Find out all the things bookkeepers can do for your business
Xero dashboard
See your key information on the business dashboard
Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.
