Whether you own a small business, lead a corporate team, or run a nonprofit, managing your finances on top of everything else can be time-consuming and stressful. That’s why a lot of organizations hire professionals to handle the bookkeeping and accounting.
But when it comes to a bookkeeper vs. accountant, what’s the difference? And which one does your business need?
In this post, we’ll break down what bookkeeping is, what accounting is, and explore both roles, so you can choose the right financial partner for your specific goals.
What is Bookkeeping?
Bookkeeping is the process of recording and organizing your business’s financial transactions. This includes tracking receipts, tracking and categorizing expenses, managing accounts payable and receivable, reconciling bank statements, and, sometimes, preparing reports like income statements and balance sheets.
In short, bookkeeping services focus on keeping your financial records organized and current. This makes it possible to accurately measure business performance and manage your finances accordingly.
What is Accounting?
Accounting, on the other hand, involves classifying, analyzing, and summarizing the financial data that a bookkeeper collects. An accountant looks at the bigger picture to make sense of the numbers. They provide valuable, data-informed insights that support decision-making, tax planning, and long-term strategy.
The main difference between accounting and bookkeeping is that while bookkeeping is about keeping records, accounting is about understanding and interpreting the records to drive business decisions.
What Does a Bookkeeper Do?
A bookkeeper focuses on the day-to-day tasks that ensure financial records are kept up to date. While the method of bookkeeping varies depending on factors like the size of a business, the industry, and the volume of transactions, key responsibilities of a bookkeeper often include:
- Recording daily financial transactions (sales, expenses, receipts, etc.)
- Maintaining a general ledger and chart of accounts
- Generating invoices
- Processing payroll and remitting payroll deductions
- Handling accounts payable and receivable
- Performing bank reconciliations
- Generating monthly or quarterly reports
Bookkeepers set the foundation for accounting services because accurate and organized records make it easier for accountants to perform their job effectively.
What Does an Accountant Do?
An accountant, particularly a Chartered Management Accountant, takes a much more analytical role in financial management. Their responsibilities can include:
- Preparing comprehensive financial statements like balance sheets, income statements, and cash flow statements
- Making adjustments, if needed, to correct any bookkeeping errors and account for things like depreciation
- Conducting financial analysis, such as cost analysis, to identify areas for improvement and suggest cost-saving opportunities
- Managing tax prep, reporting, and planning with an eye towards minimizing your business’s tax liability
- Forecasting the impact of financial decisions, such as investments and purchases
- Helping with financial budgets
- Assisting with regulatory compliance and ensuring adherence to accounting standards and tax laws
- Providing business consulting to support decision-making and long-term growth
Bookkeeper vs. Accountant Qualifications
Bookkeeping isn’t a regulated profession in Canada. Though many companies require a degree or certification in bookkeeping, the job doesn’t usually mandate any formal education. That said, it’s in your best interest to choose a bookkeeper with an understanding of accounting.
An accountant has a minimum of a bachelor’s degree. To become a Chartered Accountant, such as a Chartered Management Accountant, one must complete additional training, obtain on-the-job experience, and pass an examination.
The Difference Between Accounting and Bookkeeping
There is some overlap between the two roles, but this chart illustrates where the differences lie:
| Bookkeeping | Accounting |
| Records daily financial transactions | Analyzes and interprets financial data |
| Focuses on accuracy and organization | Focuses on strategy, planning, and compliance |
| Generates basic financial reports (e.g., income statements, balance sheets) | Prepares detailed financial reports and statements, including tax returns and forecasts |
| Handles day-to-day tasks like invoicing and payroll | Provides strategic advice for financial decisions and business growth |
Bookkeeping vs. Accounting:
Which Does Your Business Need?
The question of bookkeeper vs. accountant depends on your company’s stage and complexity. The truth is, most businesses can benefit from both professionals. After all, who has the bandwidth to become an expert in every area?
If you run a small business or are a solopreneur, you would benefit from using an accountant to handle your tax returns. As your business grows and your financial situation becomes more complex, having an accountant by your side to provide clarity and strategic insights will be extremely valuable.
A small, straightforward business could potentially rely on bookkeeping software to keep financial records organized and up-to-date. However, again, as the business grows, professional bookkeeping services will make it much easier to accurately record all transactions, manage cash flow, and prepare for taxes or audits.
Why Choose Launchbury Accounting & Bookkeeping Solutions?
At Launchbury Accounting & Bookkeeping Solutions, our founder, Harry Launchbury, ACMA, CGMA, provides both bookkeeping and accounting services in Alberta and New Brunswick. Whether you’re looking for an Alberta bookkeeper to help manage your day-to-day financial records or an accountant to provide strategic financial advice, we’ve got you covered.
Our bookkeeping services include everything from entering receipts and categorizing expenses to managing payroll and preparing financial statements.
On the accounting side, we offer services, such as tax planning, business and corporate tax prep and filing, financial analysis, and internal audits and reviews to help you feel confident and in control of your finances and create a roadmap to reaching your business goals.
Get in Touch With an Alberta Accountant
Confused about whether you need a bookkeeper or an accountant? Let’s talk! Whether you’re based in Calgary, Canmore, or anywhere else in Alberta or New Brunswick, we can help guide you toward the right solution for your business.
Book a no-obligation meeting today to get started! Once we understand your business and objectives, we can customize our services to meet your unique needs.
