Bookkeeping is the recordation of basic accounting transactions. The bookkeeper follows a prescribed set of procedures on a repetitive basis to record a common activity. A bookkeeper could compile financial statements from the aforementioned transactions. However, those financial statements would be incorrect to some extent, because they would not include the accrual or deferral of expenses, and the accrual or deferral of revenues. These are usually handled by an accountant.
Accounting also includes activities such as creating the chart of accounts, setting up the general ledger, designing the financial statements, issuing customized management reports, creating a budget, designing a record keeping, archiving, and document destruction system, etc.
In short, the difference between accounting and bookkeeping is that bookkeeping focuses on repetitive business transactions, and so is a subset of the much larger set of tasks that can be encompassed by accounting.
There are also significant differences between the bookkeeper and accountant positions.
The bookkeeper role is broad-based, with one person typically handling all of the accounting transactions for a small business.
Conversely, the accountant is more likely to work exclusively on a specific area, such as fixed assets or the general ledger.
