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Co-Founder & CEO movingo
Editor
Author
Iakov Kukushkin
Copywriter, Journalist
Oct 03, 2025
Many business owners often confuse bookkeeping with accounting. Although both involve money, they are different, and it's essential to understand this distinction since it's required by law.
In this article, we'll be talking about the difference between those two things, busting some myths and helping you decide which one is right for you.
In this article, we'll be talking about the difference between those two things, busting some myths and helping you decide which one is right for you.
- Let's start by clarifying the definitions
- What is bookkeeping?
- What is accounting?
- What does a bookkeeper do?
- What does an accountant do?
- What is bookkeeping in accounting?
- Key differences between bookkeeping and accounting
- Okay, I see. Which one do I need to choose for my business?
- Is it necessary to hire both an accountant and a bookkeeper?
- How bookkeeping and accounting work together?
- What are the differences between bookkeeping and accounting software?
- Common myths about bookkeeping and accounting
- More than accounting
- Accounting and bookkeeping FAQ
Let's start by clarifying the definitions
What is bookkeeping?
Bookkeeping is the process of recording daily financial transactions. It forms the foundation of your business's financial records.
Think of bookkeeping as keeping a detailed diary of all money that comes in and goes out.
What is accounting?
Accounting takes it a step further. It involves analyzing, interpreting, and reporting financial data. It helps business owners make smart financial decisions and ensures they comply with the law.
It usually includes VAT registration, financial reporting, audits, and tax returns.
What does a bookkeeper do?
- Record income and expenses
- Keep track of invoices and receipts
- Manage payroll (salaries and wages)
- Reconcile bank statements
- Maintain organized financial records
What does an accountant do?
- Prepare financial statements (balance sheet, profit & loss, cash flow)
- Analyze financial data for insights
- Prepare budgets and forecasts
- Ensure tax compliance
- Advise on financial strategy
Accountants use the information that bookkeepers record to create reports and provide advice.
What is bookkeeping in accounting?
Bookkeeping is basically part of accounting. If you don't have good bookkeeping, you can't do accounting. Bookkeepers gather all the raw data and accountants use it to make it more useful information.
The law says that every company has to keep proper accounts. It includes freelancers and even businesses with no income. This means that you should always keep good financial records to avoid getting into trouble with the law. We're here to help with that. We've already helped hundreds of businesses get their books in order and avoid over AED 5 million in fines.
Would you like to discuss your situation and see if we can find a solution?
The law says that every company has to keep proper accounts. It includes freelancers and even businesses with no income. This means that you should always keep good financial records to avoid getting into trouble with the law. We're here to help with that. We've already helped hundreds of businesses get their books in order and avoid over AED 5 million in fines.
Would you like to discuss your situation and see if we can find a solution?
Key differences between bookkeeping and accounting
Okay, I see. Which one do I need to choose for my business?
- If you are just starting a small business, you may only need a bookkeeper.
- If your business is growing and needs tax planning or financial strategy, you need an accountant.
We have plenty of options for freelancers and small businesses. We can certainly find something that's right for you. Do you want me to help you choose the best option for your needs?
Is it necessary to hire both an accountant and a bookkeeper?
Not always. For small companies, a bookkeeper may suffice at first. However, as your business grows, it becomes important to hire an accountant. Some companies hire one person who can perform both roles, but in larger businesses, these roles are separate.
How bookkeeping and accounting work together?
- The bookkeeper records all the financial transactions.
- The accountant reviews this data, prepares reports, and gives advice.
- Together, they provide a complete financial picture.
What are the differences between bookkeeping and accounting software?
- Bookkeeping software like QuickBooks and Xero helps you record transactions, send invoices, and track expenses.
- Accounting software such as Zoho Books, SAP, and Oracle includes bookkeeping features, as well as advanced tools for reporting, forecasting, and tax compliance.
Common myths about bookkeeping and accounting
-
Myth 1:
Bookkeeping and accounting are the same.Truth: They are different but connected. -
Myth 2:
Small businesses don’t need accounting.Truth: Even small businesses benefit from accounting for growth and tax planning. -
Myth 3:
Software can replace bookkeepers and accountants.Truth: Software helps, but people are still needed for judgment and advice.
Bookkeeping software is simpler, while accounting software is more powerful and strategic. In any case, dealing with it on your own without a competent specialist is quite difficult. Hiring one, especially at the start, can be expensive. The average salary for such a specialist in Dubai is around AED 12,000 per month. We understand the needs of small businesses, which is why we offer our services starting at only AED 400/month.
More than accounting
In addition to accounting, there's a lot of other things that needs to be taken care of to run a business successfully in the UAE. All of that's covered here:
Accounting and bookkeeping FAQ
A bookkeeper records daily transactions, while an accountant analyzes that data and gives financial advice.
Yes, bookkeeping is the first step in accounting.
Yes, bookkeeping is the first step in accounting.
Without bookkeeping, accounting cannot work. Without accounting, bookkeeping has little value.
In some cases. Bookkeepers record data, but accountants need more training to analyze and interpret it.
Popular options are QuickBooks, Xero, Zoho Books, and Tally.
Bookkeeping involves recording daily transactions
Accounting involves analyzing and reporting financial data
Auditing involves checking financial records for accuracy and compliance
Accounting involves analyzing and reporting financial data
Auditing involves checking financial records for accuracy and compliance
Sometimes. A small business may begin with only bookkeeping, but as it grows, accounting becomes essential.
Bookkeepers often need basic accounting knowledge or short courses, while accountants usually hold a degree in accounting and may be certified (CPA, ACCA, etc.).
What to read next
We organise educational webinars for business owners and freelancers every week. Check out the webinars schedule to see what’s coming next.