Bookkeeping: the recording
Bookkeeping is keeping the books current — logging income and expenses, categorizing transactions, matching payments to invoices, and keeping the ledger accurate. It's continuous and detail-oriented. Historically it's where small-business owners lose their evenings.
Accounting: the interpretation
Accounting uses those books to produce the P&L and balance sheet, file taxes, advise on structure and cash flow, and answer 'are we actually making money?' A CPA does accounting; a bookkeeper does bookkeeping (though the roles overlap in small businesses).
What your business needs
Everyone needs bookkeeping. Whether you need ongoing accounting help depends on complexity. The cheapest path is software that does the bookkeeping automatically so your accountant (or you) can focus on the accounting. With Holdings, the bookkeeping happens as money moves — transactions categorize themselves and a paid invoice is already recorded — so the books are current without a separate data-entry job.
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Frequently asked questions
Do I need both a bookkeeper and an accountant?
Many small businesses use software for bookkeeping and a CPA at tax time for accounting. Hiring a dedicated bookkeeper makes sense as transaction volume grows. Tools that automate bookkeeping reduce or remove the need for one.
Can software replace a bookkeeper?
For many small businesses, yes — automatic categorization and a unified bank-and-books system keep the books current without manual entry. Complex operations may still want a human for judgment calls.