Accountants vs Bookkeepers: What’s The Difference?
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Accountants vs Bookkeepers: What’s The Difference?25 Aug, 2022
Accountants vs Bookkeepers: What’s The Difference?Keeping track of your finances is an essential part of running a successful small business. Your financial data must be current and accurate to help you make sound business decisions and apply correct cash flow strategies. Recording and tracking the finances on your own may be a viable option in the initial stages of the business, it will become difficult as your business expands. When the bookkeeping and accounting tasks for your business become too much for you to handle on your own, it's time to outsource them to a professional like CJCPA. But do you require the services of a bookkeeper or an accountant? Even though these terms are used interchangeably due to a few overlapping responsibilities, there are some distinct differences as well. Let us assist you in deciding who to hire for your specific requirements. Difference Between a Bookkeeper & an Accountant
|Record business financial transactions - receipts, payments & expenses||Review financial statements|
|Conduct monthly bank reconciliation||Prepare adjusting entries|
|Send out and record invoices and invoice payments||Review and analyze financial statements|
|Process payroll||Analyze the cost of the operations|
|Process bill payments||Assess financial health and make financial forecasts|
|Provide the year-end financials and tax documents to the accountant||Conduct Internal Audits|
|File Tax returns, conduct tax planning, and provide tax advisory|
- Recording and Organizational services: The bookkeeper assists in tracking and organizing financial documents and reports, which helps analyze the financial health of the business.
- Direct Assessment: While accountants provide detailed analysis, a bookkeeper can provide you with a simple overview of your company's financial situation.
- Expertise: A skilled bookkeeper can provide you with peace of mind and assurance that your finances are in good hands.
- Less Expensive: Bookkeepers typically charge less than accountants for their services. The exact amount depends on the amount of filing and documentation required.
- Legal Assistance: Due to their qualification and expertise, accountants can compile financial documents & data to assist your business in dealing with any legal issues. Accountants' experience with corporate taxes can also assist businesses in avoiding CRA legal issues.
- Professional Analysis: An accountant reviews & analyzes a company's financial statements and advises business owners during financial decision-making.
- Business Finances Management: A trained accountant can keep track of your finances all year, ensuring that your reporting and statements are correct and that your accounts are properly balanced.
- Expertise: Accountants bring much more valuable expertise and advice in regards to tax returns, tax planning, and advisory.
- The company's line of business
- The inventory size of the company
- The number of employees at the company
- The range of services provided by the company
- Whether or not the company requires financial assistance