I’ve run into business owners recently who don’t quite understand the difference between and accountant and a bookkeeper. So I’m here to tell you because as a business owner it’s important to know the difference so you can decide whether or not you need one or the other or both.  Just for the record, I believe you need both (I am a little biased) and you’ll learn why later in the post.

BOOKKEEPER

A bookkeeper’s duties range depending on the bookkeeper’s experience and qualifications. Unfortunately, as I have discussed before, bookkeepers are not regulated by a governing body and so therefore anyone can call themselves a bookkeeper. In this post, I am specifically referring to bookkeepers with the education, qualifications and experience to perform full cycle bookkeeping. So, what does that entail?

• Data entry of Sales and Expenses
• Bank reconciliations
• Payroll calculations
• HST, Source Deductions and WSIB calculations and filings
• Preparing of and basic evaluation of financial statements
• Write cheques or pay your bills on line (if you trust him/her with that task)
• Bank deposits
• Liaise with CRA and WSIB on your behalf (this is especially helpful as many business owners are intimidated by government body representatives)

In short, a bookkeeper will, at the bare minimum, keep you compliant with those government bodies. But, they can do so much more! In fact, a bookkeeper can perform any of the duties required to run the business end of your business! It’s up to you how much or little you would like, or trust, your bookkeeper to do!

That’s enough bragging about bookkeepers :)

ACCOUNTANT

This is where the big guns come in. Accountants are highly trained professionals who are governed by a professional body: they are Chartered Professional Accountants. Accountants are concerned more so with the ‘Big Picture’ and though I don’t understand fully the scope of what accountants do, here’s what I can tell you about them.

• Reviews and analyzes your yearly financial data
• Prepares tax returns
• Prepares adjusting entries when necessary
• Ensures you are compliant with tax laws
• Offers tax and estate planning advice
• Offers advice on overall business operations

This, by no means, covers anywhere near all of what accountants can do for you but it gives you an idea of the difference between an accountant and bookkeeper.

SO, DO YOU NEED AN ACCOUNTANT OR BOOKKEEPER?

My professional opinion is that you require both and accountant and a bookkeeper. Here’s a little article I like from Intuit on the bookkeeping and accounting functions. The bookkeeper and the accountant are a team of financial professionals that you need on your side if you own a business. Together, they keep your financials in order while you run your business. I see many business owners who only feel that they need an accountant at year end to do their taxes. They don’t understand that there is so much more to running a business. To learn more about why you need a bookkeeper, read a previous blog of mine, here .

Here’s to your financial health!