“OK, what’s the difference between bookkeeping and accounting?”

It might seem like bookkeeping covers all of the finances of your small business, but there’s a lot of other information that bookkeeping simply does not provide. Bookkeeping is really only a slice of the accounting pie, and a healthy business needs more than one slice of pie.

Accounting Basics

Accounting, at the most basic level, is the system of recording and summarizing business finances. Now that might sound really familiar if you read our last blog, but stay with me! It’s more than just recording the transaction like we do when bookkeeping, accounting also means verifying, analyzing, and reporting these transactions. Accounting also includes the theory and method by which you do all of the above.

Bookkeeping is one of the systems that makes up accounting. So you need bookkeeping to do accounting for any business, but successful bookkeeping does not require...