Bookkeeping vs Accounting: Which Should You Study?
If you’re good with numbers and interested in offering practical services to keep people and business owners on top of their finances, you may enjoy a career in bookkeeping or accountancy. But what are the differences between them? And which is right for you?
Both bookkeepers and accountants are essential to managing the finances of a business, but with key differences. Bookkeepers specialise in recording day-to-day transactions like invoices, expenses, and payroll. Accountants, meanwhile, handle tax obligations and will interpret longer-term business data to get an overall picture of business profit and loss, allowing them to provide advice on financial strategies and project future earnings.
What a bookkeeper does
Bookkeepers undertake duties such as:
What’s the industry like?
On average, Australian bookkeepers earn $1234 per week, with higher wages for those with more experience. Stable future growth is also expected for the profession, according to JobOutlook.
Stable Future Growth Projected
People with bookkeeping expertise are important to the financial health of many different businesses. Because of this, bookkeepers work in a range of sectors including:
When is it useful to have accounting knowledge?
It can be useful to have knowledge in bookkeeping if:
You'd like to run your own firm
Many accountants are self-employed.
You want to help out your local community
Many clubs, societies, and non-profit organisations rely on volunteer bookkeeping services to manage their funds.
You'd like to build your financial skills
People with training in bookkeeping will be able to prepare a budget and understand their personal finances.
What an accountant does
While bookkeeping is process-driven – making sure important transactions happen smoothly on a daily basis – accounting is more analytical. It involves summarising and interpreting a business’s financial information so that the management understands their position and can make important decisions.
Accounting professionals perform duties such as:
There can be some overlap with bookkeeping tasks such as reviewing cash flow, working with financial data, and producing financial documents.
What’s the industry like?
On average, Australian accountants earn $1660 per week, which grows as you get more experience. Strong future growth is expected for the industry.
Strong Future Growth Projected
Most accountants are employed by accounting firms but may be required in-house in a range of industries.
When is it useful to have bookkeeping knowledge?
Beyond working as an accountant, training in accountancy can be useful if:
You want to become a small business owner
You’ll understand how businesses operate already, and so can hit the ground running when it comes to managing cash flow and business records.
You're interested in consultancy
Because accountants understand taxation and regulatory requirements, business structures, and accounting systems, people with a background in accounting are sought after consultants.
If you like to travel
Although regulations are different in different countries and you’ll need to adapt to different contexts, accountants can find employment all around the world.
You're interested in lifelong learning
Accountants need to continually undertake training to retain professional accreditation and to stay up to date with legislative changes.
You like the idea of senior management roles
Chief Financial Officers and Financial Controllers often get their start as accountants.
Comparing bookkeeping and accounting courses
From the outset, bookkeeping and accounting may seem similar – both make important contributions to the smooth financial operation of businesses – but are quite divergent in the background and training required, expected salaries, and the specific tasks both are responsible for.
Bookkeepers hit the ground running in managing the day-to-day finances of businesses, without requiring long periods of study to do so. Accountants, meanwhile, take a step back in analysing the overall financial position of organisations, which requires years of study.