The dreaded world of business finances. Every business has them, and unless you hire a bookkeeper or accountant to take them over, it’ll always be something you have to keep up to snuff if you want to have a successful business.
You know this already. That’s why you’ve stumbled on this article – to hire help. So, what kind of support do you need? Do you need a bookkeeper or an accountant?
Bookkeeping v. Accounting
Bookkeeping lays the foundation for the accounting process to take place. Bookkeeping is the recording of financial information in the form of income and expenses. This involves organizing and itemizing receipts and invoices and keeping track of your accounts payable and receivable.
The financial information of the business is then organized on a spreadsheet or in a bookkeeping software. Bookkeepers can offer a variety of services that go over and above merely recording financial information. They often provide payroll services, purchase order services, and non-incorporated tax filings.
Accountants use the information compiled by a bookkeeper to provide advice and expertise when it comes to a business’s financial strategy.
Accountants also complete year-end accounts and filings. They can complete your corporate annual tax return and are well versed in tax laws and credits to ensure that you’re taking full advantage of any deductions and exemptions.
A Day in the Life of a Bookkeeper
A bookkeeper’s task list involves every finance piece that goes into your business. Recording every transaction is crucial to your business’s success, and that’s what your bookkeeping will do for you.
A bookkeeper’s day includes many tedious tasks that track the money going in and out of your business so that you can see where your business stands at any given time.
So, what exactly does a typical day look like for a bookkeeper? Depending on the scope of the services offered by a specific bookkeeper, you may find them:
- Classifying, sorting, and managing receipts
- Maintaining the general ledger
- Recording accounts payable and receivable entries
- Preparing Profit & Loss Reports, Balance Sheets, and Charts of Accounts
- Preparing HST remittances
- Providing payroll services
The above tasks are a part of a bookkeeper’s typical day; however, they can offer a wide range of services depending on their expertise level.
What Credentials do Bookkeepers Need?
Bookkeepers aren’t required to be certified, but they can take this step to validate their experience and expertise.
In Canada, bookkeepers can choose to be certified with a variety of organizations, including:
- Certified Professional Bookkeepers of Canada
- The Canadian Institute of Bookkeeping
- QuickBooks (Software Certification)
A Day in the Life of an Accountant
A day in the life of a Certified Professional Accountant (CPA) involves reviewing and analyzing the information compiled by a bookkeeper to help determine a business’s financial health.
They would use this information to provide advice, make decisions, and complete tasks.
The daily tasks of an accountant involve:
- Reviewing Balance Sheets, Income and Cash Flow Statements
- Providing financial advice
- Providing tax advice and preparing corporate tax returns
- Providing financial projections and business planning
Although accountants in the public sector perform duties such as those listed above, CPA’s have the opportunity to work in a variety of sectors, including:
- Industry (as an in-house accountant, a CEO, a President of an organization, etc.)
- Government (tax auditors, financial analysts, etc.)
- Not-For-Profit Organizations
It’s important to note that although accountant’s can file any type of tax return, if your business is a sole proprietorship or partnership, you can have your bookkeeper file your return to make the process as seamless and convenient as possible.
What Credentials do Accountants Need?
A Certified Professional Accountant requires more formal education than a bookkeeper. To be admitted to the CPA Professional Education Program, an individual must complete an undergraduate degree (meeting subject matter requirements).
Should You Take Advantage of a Powerhouse Finance Team?
Bookkeeping and Accounting are two professions with differences and similarities.
Each position will benefit your business differently, and when combining expertise on both sides, you’ll have yourself a great team.
Having an excellent bookkeeper that understands how to organize and record your data accurately is crucial to receiving useful and accurate advice from your accountant. It will also be imperative to filing an accurate tax return.
Your accountant has specific expertise in financial strategies and corporate tax returns, which will work nicely in conjunction with your bookkeeper’s diligence and hard work if you choose to go that route.
Two heads are always better than one. In this scenario, it’s no different.
Taking advantage of the expertise of both professionals will ensure nothing is overlooked regarding your business’ strategy and tax deductions and exemptions.
It will save you time and ease your mind knowing you have two professionals on your side that will ensure your success.
If you’re looking for a bookkeeper to be a part of your business finance team, schedule an initial consultation with us today, and we can discuss the services we offer that are crucial for your finance team.