Hello! This is Elijah, the Founder of Lumina Bookkeeping in Quincy, MA. This week’s post is about something I hear all the time and want to set the record straight on. You may have heard, or perhaps even believe, the misconception that bookkeeping and accounting are one and the same. So, here’s why the two are different and what makes this misunderstanding so common.

      To put it simply, bookkeepers focus on accurately capturing the past, while accountants zoom out to look at the bigger picture. Bookkeepers enter all of your financial transactions into the “books,” usually a cloud software like QuickBooks or Xero. That’s us! If necessary, we address any discrepancies immediately, instead of letting them fester. Accountants take all of this data to conduct compliance checks or file tax returns, typically at the end of the year.

      Bookkeepers and accountants are often thought of as the same thing because of how connected their work is. It’s like two individually talented athletes who perform best together. Bookkeepers need accountants because they do not have the knowledge to file taxes and point out tax-deductible expenses for the various combinations of business structures, states, and industries. Similarly, accountants need clean books because of time. Overtime is a common occurrence around tax deadlines already, and having to sort through years of messy, incomplete data on a time crunch is the last thing they want. Just ask your accountant!

      That’s the difference between bookkeeping and accounting, and why the confusion is so common. If you want to do your accountant a favor for all the hard work they do, get yourself a bookkeeper! You’ll also benefit from it. More weekends that actually feel like weekends because you’re not stuck doing the bookkeeping, and a nice holiday season without your CPA constantly trying to chase you down.