Bookkeeping is the daily recording of a business’s financial transactions. Accounting is the work of summarizing, interpreting and reporting on those records. Bookkeeping answers "what happened?" Accounting answers "what does it mean, and what do we owe?"
Our back office team works inside each client’s own QuickBooks Online or Xero file, alongside the accountant or CPA who reviews it. This guide reflects how that division of work runs in practice.
What bookkeeping covers
- Recording sales, purchases, receipts and payments.
- Categorizing transactions to the chart of accounts.
- Reconciling bank and credit card accounts.
- Entering supplier bills and issuing customer invoices.
- Tracking what is owed to you and what you owe.
- Preparing payroll data.
- Keeping source documents organized.
Good bookkeeping is accurate, current and consistent. It is routine work, and its value comes from being done every week.
What accounting covers
- Closing the books each month and year, including adjustments for items such as accruals and depreciation.
- Preparing financial statements: profit and loss, balance sheet and cash flow.
- Analyzing results and advising on decisions.
- Tax planning and preparing tax returns.
- Audits, reviews and other assurance work.
Accounting depends on judgement and, for some tasks, on a license.
The differences side by side
- Purpose. Bookkeeping records; accounting interprets and reports.
- Timing. Bookkeeping is daily and weekly; accounting is monthly, quarterly and annual.
- Output. Bookkeeping produces a reconciled ledger; accounting produces statements, tax filings and advice.
- Credentials. Bookkeepers do not need a license. Certified public accountants are licensed by state boards, as described by NASBA, and only they can sign audit opinions.
- Decisions. Bookkeepers follow the rules you and your accountant set; accountants help set them.
Where the two overlap
In a small business the line blurs. A capable bookkeeper often prepares the month end close and draft statements, and the accountant reviews them. That middle layer, sometimes called full charge bookkeeping or accounting support, is where most of the routine hours sit.
Which one does your business need
- You are behind on entering transactions or reconciling: you need bookkeeping.
- Your books are current but nobody closes the month or produces reports: you need accounting support.
- You need a tax return filed, tax advice or an audit: you need a CPA or licensed tax professional.
- You want to understand margins, cash flow or pricing: you need an accountant or a fractional CFO, working from clean books.
Most businesses need all of these at different depths. The common mistake is paying an accountant’s hourly rate for bookkeeping, or expecting a bookkeeper to give tax advice.
What can be outsourced
Almost all bookkeeping and much of the routine accounting can be done by a remote team working in your own software:
- Weekly categorization and reconciliation.
- Accounts payable and receivable.
- Month end close checklists and draft statements.
- Payroll data preparation.
- Organizing year end documents for your CPA.
See our outsourced bookkeeping, outsourced accounting and accounts payable and receivable pages for how we handle each.
What should stay with a licensed professional
- Tax returns and tax advice.
- Audit, review and compilation reports.
- Decisions on accounting policy.
- Approval and release of payments, which should stay with the business itself.
Our bookkeepers are not CPAs and do not do these things. They prepare the records those professionals rely on.
Records you are required to keep
Whoever does the work, the business stays responsible for its records. The IRS explains what kind of records a business should keep, including receipts, invoices, bank statements and payroll records. A bookkeeping routine exists largely to keep those complete.
Frequently asked questions
What is the main difference between bookkeeping and accounting?
Bookkeeping records and reconciles financial transactions. Accounting summarizes, interprets and reports on them, and includes tax and advisory work.
Do I need both a bookkeeper and an accountant?
Most businesses do. A bookkeeper keeps the records current and an accountant or CPA reviews them, handles tax and advises on decisions.
Can a bookkeeper do my taxes?
A bookkeeper can prepare the records a tax return is built from. Preparing and signing the return and giving tax advice belong with a CPA or other licensed tax professional.
Can bookkeeping be done remotely?
Yes. Cloud accounting software lets a remote bookkeeper work in your own file with the permissions you set.
Sources
About eleVAte BPO. eleVAte began in 2015 with two virtual assistants in Dumaguete City, Philippines, and is still run by its founders. Co-Founder and CEO Claire De La Pena spent almost two decades as an executive virtual assistant before building the company, which is now a 50 seat operation providing dedicated support, sales and back office teams. Meet the leadership team.
Last reviewed October 2026. This guide is general information and not legal, tax or financial advice.
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