We are often asked what Is the difference between Accounting & Bookkeeping? In the simplest sense:
- Bookkeeping is designed to generate data about the activities of an organization.
- Accounting is designed to turn data into information.
When the accounting tasks and data entry for your small business are more than you want to handle by yourself, it may be time to hire help.
But do you need an accountant or a bookkeeper? The terms are sometimes used interchangeably, and there can be some overlap in what they do, but there are some distinct differences.
Accountant:
An accountant’s main responsibility is to audit accounting data and to provide financial advice to individuals and organizations.
An accountant’s goal is to ensure that their clients adhere to provincial and federal regulations and that all Generally Accepted Accounting Principals (GAAP), defined as providing the framework of broad guidelines, conventions, rules and procedures of accounting, are followed.
An accountant works in the capacity of a Financial Advisor and Auditor, focusing on assisting clients in maximizing profits.
In Canada, Chartered Professional Accountants (CPA) individuals have completed a specialized course to become certified as CPAs.
Accountant Responsibilities:
- Preparing annual financial reports
- Review financial records for accuracy
- Analyzing revenue and expense statements
- Prepare a summary report on the financial status of their businesses
- Advise clients on financial matters (e.g. business improvement, cost reductions, and insolvency):
- Analyse cost reductions to improve and maximize profits
- Prepare cash flow forecasts
- Prepare and file appropriate corporate tax returns
- Review tax saving opportunities
Bookkeeper
As a small business owner, your financial data is vital to making timely, sound financial decisions.
Having access to up to date financial data allows you to monitor revenue and expenses as they occur and adjust as necessary immediately.
You can hire a full time, part-time or remote bookkeeper depending on the size and volume of transactions.
Bookkeeper Responsibilities:
- Records daily financial transactions including:
-
- Purchases
- Sales Invoices
- Payments
- Receipts
- Prepare bank & credit card reconciliations
- Prepare monthly reports for review
- Filing GST/HST returns
There is more to responsible bookkeeping than simply knowing how to enter data. Experienced bookkeepers are knowledge about business accounting, they have the education and skills necessary to carry out all key functions throughout accounts payable, accounts receivable, payroll, sales taxes, inventory and general bookkeeping.
If you are looking to hire an accountant, a bookkeeper or both contact our office for a detailed overview of your specific requirements.
