Bookkeeping is all about recording and organising financial data while accountants take that data to prepare reports and get them ready for HMRC.

This blog will outline the difference between bookkeeping and accounting in more detail so you can easily tell them apart.

What the Dictionaries Say

Bookkeeping

The dictionary definition of bookkeeping is defined as “the skill or occupation of maintaining accurate records of business transactions.”

In simple terms, bookkeeping is recording and organising financial data.

Accounting

When it comes to accounting, the dictionary states accounting as “the skill or practice of maintaining and auditing accounts and preparing reports on the assets, liabilities etc of a business.”

Basically, accounting takes all of that important financial data, prepares reports for business owners and investors and ready’s the reports for HMRC.

What is Bookkeeping?

A bookkeeper is someone who will accurately record financial data of a business. The main purpose is to make sure that every entry is correct on a daily basis while keeping a log of all the transactions in the books.

By doing this, a bookkeeper can record and calculate income and expenses, make bank transactions, create sales invoices and raise purchase invoices.

We’ve tried to make things super simple to understand. But if there’s ever any term you’re slightly unsure of and you need a quick definition, then head over to and bookmark this glossary blog where we’re regularly adding bookkeeping and accounting terms.

Bookkeepers also make sure that the accounts of a business actually balance. They have the knowledge and skills to explain crucial financial information to business owners and make these reports actually make sense based on this information.

Some other responsibilities of bookkeepers include providing information in report formats, creating and updating daybooks, analysis reports and debtor reports.

What is Accounting?

Accountants, on the other hand, are mainly responsible for generally overseeing accounts and producing financial statements and tax returns that are in compliance with the law.

Accountants need to have expert knowledge in financial laws and ethical issues as part of their role involves understanding data and providing financial advice that can affect a business.

There are different types of accountants - some that work for public accounting firms and handle multiple businesses while others might just focus on one. At the end of the day, an accountant will adjust the entries made by bookkeepers at the end of each financial period. They do this by preparing adjusting journal entries and producing documents like profit and loss as well as balance sheet reports.

After assessing the findings, accountants help businesses make informed decisions.

What Bookkeeping and Accounting Roles Typically Consist Of

We can’t speak for every single bookkeeper or accountant on the planet, but there are some typical duties that each role does, which is what makes them so different.

What’s important to know, though, is that some tasks bookkeepers and accountants do can vary between businesses. Especially in the case of smaller businesses, bookkeepers might do some basic accounting duties as there’s sometimes a bit of an overlap.

Typical Bookkeeping Duties

• Processing and maintaining a payroll system.

• Processing invoices.

• Preparing initial financial statements.

• Processing receipts, payments and other financial transactions.

• Recording business transactions.

• Managing accounts receivable and accounts payable.

• Processing expense claims.

• Filing and document management.

• Chasing customers for payment.

• Posting journal entries.

• Preparing and filing VAT returns.

• Providing basic tax advice.

Typical Accounting Duties

• Preparing adjusting entries.

• Preparing financial statements and reports.

• Completing income tax returns.

• Financial analysis and strategy.

• Tax strategy and tax planning.

• Financial forecasting.

• Organising budgets.

• Analysing business performance.

• Auditing.

• Financial management advice.

• Prepare business plans and cash flow forecasts.

Obviously, the roles of accountants and bookkeepers vary from business to business. However, now you know that although the two often cause confusion, they’re actually quite different.

Even though it sounds like bookkeeping is a challenge, it’s quite simple to do once you’re using digital software. That’s something you’re probably not going to be able to avoid when the Making Tax Digital deadline is here, but there’s software available that makes it easier than ever to manage your books and avoid the hassle of endless paperwork.

Take the Next Step to be Ready for Making Tax Digital

It’s completely normal to be curious about Making Tax Digital and have plenty of questions. If anything, it’s been introduced by the government to make everything much easier for you - but there’s still a lot more to know.

To help, we've created a Making Tax Digital summary sheet for you to use whenever you feel necessary. Download your very own copy below.