On the other hand, accounting is an information system – includes the process of recording, classifying, summarizing, reporting, analyzing and interpreting the financial condition and performance of a business – in order to communicate it to stakeholders for business decision making.
Because of one similarity in the nature of work, oftentimes, a bookkeeper and accountant are believed to be the same and used interchangeably. However, despite the fact that both perform the process of recording business transactions, a bookkeeper and an accountant are two different professions or careers.
Bookkeeping is an important part of the accounting information system because it serves as the groundwork of accounting. Bookkeeping is a branch of accounting which is responsible in recording the financial transactions of the business. It is the starting point of the whole accounting process. The person responsible on the bookkeeping process is often referred to as bookkeeper or accounting clerk. They are the one who ensures the recording of business transactions in the book of accounts, such as journals and ledgers, in chronological manner.
Bookkeepers are responsible in safeguarding the completeness and accuracy of the book of accounts. They assist accountants in preparing reports, like financial statements or tax returns, by providing summary and supporting documents of the recorded business transactions. Bookkeeping is only limited to the recording process, although in cases of small businesses, bookkeepers may also do the preparation of reports. As such, bookkeeping can be performed by non-accountants who gained relevant trainings and experience in bookkeeping.
Accounting, on the other hand, represent the whole accounting process, from recording until interpreting business financial information. Accounting is one of the most diversified professions because professional accountants have different options in which area of accounting they want to focus their career – such as financial accounting, managerial accounting, tax accounting, auditing, etc.
Unlike bookkeeping, accounting jobs are performed by accounting graduates or licensed professional accountants. Accounting involves more technical understanding and procedures compared to bookkeeping.