Accountant vs. Bookkeeper
Who Brings What To The Table?
It’s easy to get stuck on job titles and what kind of work each person is expected to do.
The question of responsibilities can then be answered by breaking down the tasks and defining exactly what work needs to be completed.
Most importantly, who you hire depends on your particular situation. It also depends on your company size and whether you have employees or not.
While you absolutely need both when it comes to the financial hygiene of your business, here is a quick look at the main differences between an accountant and bookkeeper.
Who is a Bookkeeper?
Unquestionably, your bookkeeper is the Robin to your Batman when it comes to your business’ financial well being.
A bookkeeper is a transactional professional. Their role is to handle all the day-to-day tasks of keeping an accurate record of your business’ financial transactions. These transactions include all business purchases, sales, payments, and receipts (which are posted as either debits or payments).
These professionals will then provide financial statements to other finance teams, such as your accountant.
Who is an Accountant?
An accountant is a professional who is tasked with keeping and interpreting your business’ financial records.
The professional analyzes the financial data that the bookkeeper has recorded, which provides insight and advice to the business owner. Like the bookkeeper, they may generate income statements and balance sheets.
However, this expert is also tasked with audits and other financial reports. Generally, your accountant will also file your taxes (T2 or a T1).
Accountants are also a great source to discuss future plans, tax strategy and growth.
What is the Difference between the Two?
Generally, an accountant provides year end adjusting entries, helps decipher tax law and develops a tax strategy. They are also involved in an audit situation and analyze reports year over year for your business. Accountants also review those financial statements and will advise business owners on any upcoming financial decisions. Decisions such as purchasing property, land, equipment, or taking out a loan for your business should always be discussed with your accountant.
Whereas, bookkeepers record and categorizes daily cash inflow and outflows. They record any payments received and might also send customer invoices. A bookkeeper also comes into play by providing the end-of-the-year financial reports and any supporting documentation so the accountant can properly file a tax return. They also conduct bank reconciliations each month and generate monthly financial statements.
Bookkeeping may also involve processing payroll and filing sales tax. While accounting will involve assessing the overall financial health of the business, making financial forecasts and performing audits.
Essentially, both professionals are heavily involved in managing a business’ finances, but at different stages of a business’ life.
Fortunately, you can outsource bookkeeping roles to Indigo Bookkeeping Services for accurate and professional accounting.