What is the difference between a Bookkeeper and an Accountants? Why do I need a Bookkeeper?
If you’re anything like a large number of businesspeople, you’re not really sure how a bookkeeper differs from an accountant. Truth be told, some individuals don’t even have a clue as to what a full-cycle bookkeeper actually does.
Here, at Preferred Client Services, not only are we well-versed in hiring and training bookkeepers to make life easier for our clients, we are an entire firm of bookkeeping experts ourselves. The businesses that prefer not to keep an in-house financial team on staff, simply contract us to work with them as a part of their team instead. All in all, we know bookkeeping inside and out.
Furthermore, our quality services are sought after not just by business owners and entrepreneurs but by a large number of accounting firms as well. Consequently, we know all about what accountants do too, so sit back, relax, and we’ll share some excerpts from our new seminar, “Everything I Ever Really Needed to Know in Life, I Learned from Listening to my Bookkeeper.”
Now, if you felt sick with a simple cold, you probably wouldn’t go to your doctor at first. No, you’d be far more likely to visit your friendly neighbourhood pharmacist and seek their advice in finding an effective remedy. A pharmacist is an expert in the medical field, specializing in medicine. Always accessible, they are there to lend an empathetic ear, to listen to your little litany of health care complaints as they come and go throughout the year. Maybe they don’t get as much “publicity” as the doctor who is the one we seek out for the serious situations that need tests, diagnostics, or official procedures, but that doesn’t mean they are any less the professional in their field. They just play a more specific, ongoing, day-to-day role in your total healthcare.
Bookkeeping Functions versus Accounting Functions
Your full-cycle bookkeeper would fulfill a similar type of role in maintaining the financial health of your business by classifying and entering daily transactions, as well as providing advice on how best to create a budget, streamline your accounting processes, or effectively interpret the data in your financial reports. While your accountant would be the one to perform audits and provide certified financial statements in specific situations, your bookkeeper would deal with the everyday financial logistics like keeping track of accounts payable and receivables, tracking and recording expenses, checking them against the budget, and ensuring that employee payroll documentation is completed accurately.
Yes, your brilliant bookkeeper would do everything to prepare your organization for tax time like filing remittance reports for payroll and GST with CRA, but your professional accountant is the one authorized to actually file business and personal income tax returns. Bookkeepers track the day to day financial activity and can spot any noticeable trends, while accountants are more focused on an overall view of their clients, potentially both business and personal finances as well, so they can provide crucial advice for tax and corporate planning.
While your bookkeeper actively helps your accountant by looking for salient changes to the organization or significant financial events that need to be addressed, your accountant is likely the one with whom you’ll discuss minimizing your tax liability or whether or not to incorporate your business. Accountants are also responsible for the preparation of the company’s year-end financial statements, such as the income and balance sheets, and will further assist your management team to understand the financial impact of its past and future decisions.
You can see clearly that bookkeepers would use all their formal education, training, and certified on-the-job experience to your advantage right down to making recommendations on the types of business accounting software that will work well in your application. The fact that they lack the accounting designation of CPA does not make them any less valuable as a key component of your business finance team. Your bookkeeper and accountant play specific roles that actually complement each other as much as they are essential to your success.
Hopefully, these new perspectives will aid you in making decisions as to what’s best for the ongoing financial health of your business.
You need to find the right bookkeeper, whether it be an enthusiastic novice who can be trained to do the job in the exact way you want it done, or whether it be a seasoned professional who has the experience to competently step in and take charge without missing a beat.
We, at Preferred Client Services, are happy to help in any and every scenario. We can step in and train that up and coming beginner to your specifications, so they’re ready to take on any job, or we can fill in until you can hire that independent, experienced professional who is naturally a little more challenging to find. In fact, you know you could just contract our own team of full-cycle bookkeeping services to save time and money, thereby rewarding yourself with the best of all worlds! Our bookkeeping professionals are happy to even work there at your office if that’s what suits you best.
Bookkeepers may spend their careers in the background bolstering up businesses by “counting the beans”, as the old saying goes, but just like the biggest, brightest surgeon would turn to a pharmacist for advice on the intricacies of a specific drug, accountants often turn to us as bookkeepers to step in and do what they do best, so they can, in turn, serve their accounting clients in a timely, more efficient manner.