Bookkeeping and Accounting both are used interchangeably in the financial world, but there is a difference between bookkeeping and accounting. Bookkeeping is a part of accounting whereas accounting itself is a wider concept.
Meaning of Bookkeeping – Bookkeeping means the activity of maintaining financial records on day-to-day basis. Thus, Bookkeeping is a systematic record of financial transactions in the appropriate books of records.
Few activities involved under bookkeeping are;
1. Entering invoice and voucher details into Accounting software or ERP systems
2. Recording payments received by customers.
3. Recording payments made to vendors.
4. Recording of expenses made during the year etc.
Meaning of Accounting – Accounting is an art of recording, classifying, summarizing and interpreting the financial information in a significant manner. In simple terms, accounting means keeping a track of our Income, Expense, Assets & Liabilities.
Accounting information is used by various types of parties for several different reasons. Activities involved under accounting are;
1. Preparation of Trial balance, Ledger accounts, etc.
2. Preparation of Financial statements.
3. Analysis of Financial data etc.