The two really overlap: Bookkeeping is part of accounting. It is the recording of the day to day transactions of a business – either in “manual” books, or on computer software or spreadsheets.
Therefore, bookkeeping can play an important role in the efficient running of a business:
Purchase Ledger – A business needs to pay its bills and it must therefore keep a record of those bills so that the correct amounts can be paid at the correct times and also so that bills are not paid twice by mistake.
Sales Ledger – Similarly, a business needs to keep track of all it’s sales and the cash and cheques received from customers. Generally, all these things are fall within bookkeeping.
Accounting builds on the bookkeeping information, traditionally taking it from “trial balance” stage and then interpreting it, compiling reports, year-end accounts, tax returns, budgeting and carrying out financial analysis and so on.
