What is the difference between bookkeeping and accounting?
Bookkeeping records transactions. Accounting interprets those records to help you make decisions and file taxes.
A bookkeeper categorizes expenses, reconciles bank accounts, and makes sure your books are accurate and up to date. They handle the day-to-day data entry and monthly close.
An accountant or CPA takes those clean books and prepares tax returns, gives you financial advice, handles audits, and helps with business strategy. They need accurate books to do their job well.
Most small businesses need both. A bookkeeper keeps your records current throughout the year. Your CPA uses those records to file taxes and give you advice on minimizing what you owe.
You can’t skip bookkeeping and expect your accountant to figure it out at tax time. That costs more and usually results in missed deductions because nobody documented things correctly during the year.
More Questions
What is job costing?
Job costing tracks all costs associated with a specific project or job so you know if that work was profitable after accounting for materials, labor, and overhead.
Read answerWhat is payroll tax?
Payroll tax is the federal and state taxes you withhold from employee paychecks and pay on wages. This includes Social Security, Medicare, unemployment, and income tax withholding.
Read answerHow much does bookkeeping cost?
Monthly bookkeeping starts at $199. Your actual price depends on transaction volume and business complexity.
Read answerShould I use cash or accrual accounting?
Most small businesses under $5M in revenue use cash basis because it's simpler and matches cash flow. Accrual is required for larger businesses and inventory.
Read answerCan I do my own bookkeeping?
You can do your own bookkeeping if your business is simple and you have time to learn. But most owners who try end up with messy books that need professional cleanup.
Read answerHow often should bookkeeping be done?
Bookkeeping should be done monthly at minimum. Weekly is better for high-volume businesses. Waiting longer than a month means errors compound and records get forgotten.
Read answerDFW's Trusted Bookkeeping Firm
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