Thinking of bank accounts as a record of money flow is useful, but incomplete. Bank statements show descriptions and totals, not context or categories. They won’t tell you how much you spent on expenses like office supplies, continuing education, or how much each line of revenue received. Bookkeeping does.

Often I see accounting and bookkeeping used interchangeably. Bookkeeping is part of the accounting cycle, but the distinction matters. All accountants are bookkeepers in a broad sense, but not all bookkeepers are accountants. In some states it is unlawful to call yourself an accountant without proper licensure, while bookkeeping is not a regulated field.