On to the terminology: We have already said the words "accounting" and "bookkeeping." Accounting is the big picture, the system that keeps track of data (including people), records your transaction history, gives you reports -- those all-important pictures of your company. Accounting also encompasses payroll, an area of particular concern since huge fines can accompany small mistakes. Of equal weight is the tax status of your company. Accounting is the system that will provide the reports and information you need.
Bookkeeping is the tedious part -- the systematic recording of amounts, dates, and sources of every revenue and expense you generate. Think of accounting as a giant sifter and of bookkeeping as the process of pouring stuff into it. Things get stirred around and you get the information you need to run your business.