Bug tracking = I found a bug in 1 functionality. I am 
writing in a bug sheet document which i maint for all the 
bugs for that particular test script . 
Bug reporting = I am assigning bug to a developer who will 
fix it.

Bug tracking: after found a bug it will documented its 
called bug tracking(example:where is the bug found like 
that)
bug reporting:After found any bug it will send to our team 
leader. Its called a bug repoting.

How to report a bug?

It’s a good practice to take screen shots of execution of
every step during software testing. If any test case fails
during execution, it needs to be failed in the bug-reporting
tool and a bug has to be reported/logged for the same. The
tester can choose to first report a bug and then fail the
test case in the bug-reporting tool or fail a test case and
report a bug. In any case, the Bug ID that is generated for
the reported bug should be attached to the test case that is
failed.

At the time of reporting a bug, all the mandatory fields
from the contents of bug (such as Project, Summary,
Description, Status, Detected By, Assigned To, Date
Detected, Test Lead, Detected in Version, Closed in Version,
Expected Date of Closure, Actual Date of Closure, Severity,
Priority and Bug ID etc.) are filled and detailed
description of the bug is given along with the expected and
actual results. The screen-shots taken at the time of
execution of test case are attached to the bug for reference
by the developer.

After reporting a bug, a unique Bug ID is generated by the
bug-reporting tool, which is then associated with the failed
test case. This Bug ID helps in associating the bug with the
failed test case.

After the bug is reported, it is assigned a status of ‘New’,
which goes on changing as the bug fixing process progresses.

If more than one tester are testing the software
application, it becomes a possibility that some other tester
might already have reported a bug for the same defect found
in the application. In such situation, it becomes very
important for the tester to find out if any bug has been
reported for similar type of defect. If yes, then the test
case has to be blocked with the previously raised bug (in
this case, the test case has to be executed once the bug is
fixed). And if there is no such bug reported previously, the
tester can report a new bug and fail the test case for the
newly raised bug.

If no bug-reporting tool is used, then in that case, the
test case is written in a tabular manner in a file with four
columns containing Test Step No, Test Step Description,
Expected Result and Actual Result. The expected and actual
results are written for each step and the test case is
failed for the step at which the test case fails.

This file containing test case and the screen shots taken
are sent to the developers for reference. As the tracking
process is not automated, it becomes important keep updated
information of the bug that was raised till the time it is
closed.