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

Bookkeeper	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

Basically, the bookkeeper’s role is to record transactions and keep the business financially organized, whereas accountants are in charge of categorizing, evaluating, interpreting, reporting, and summarizing this financial data. Accounting begins where bookkeeping ends A bookkeeper is responsible for the initial categorization and recording of a company's transactions such as bills paid, daily sales, payroll, and other expenditures. As part of the accounting process, the bookkeeper must correlate and insure the books or records and present them to the accountant. An accountant, on the other hand, examines the bookkeeper's financial records and statements to aid in analytical interpretation. The professional accountant analyzes and interprets bookkeeping data to assess financial health and make financial forecasts. Advantages of Hiring a bookkeeper

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.

Advantages of Hiring an Accountant

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.

A Bookkeeper or An Accountant: Whom To Hire? Hiring online bookkeeper and accountant services is essential for every business. However, the need for one or the other may vary for each business. Understanding when the professional expertise of a bookkeeper or accountant is required, either separately or jointly, will be determined by factors such as:

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

Outsource Your Company’s Financial Services to Professional Bookkeepers and Accountants: The business world is constantly changing, and regulations that keep businesses afloat, such as licensing and taxation, necessitate exceptional financial accounting services. Most transactions involving partners or financial institutions require transparent and trustworthy financial statements. The best business manager is the one who understands the company's accounting needs and knows when to hire a bookkeeper versus an accountant. Consider partnering with CJCPA, we provide bookkeeping, accounting, and business advisory services that are customized to your specific business requirements. Book a free consultation today or drop us an email at jas@cjcpa.ca.