Edmonton's Accountants and Bookkeepers: what's the difference?
Bookkeepers and accountants are both financial professionals and both play a critical role in keeping your business books compliant and successful. But their day-to-day activities look quite different.
This post will outline the difference between accountants and bookkeepers, and how they can help your business in Edmonton or Fort Saskatchewan.
The difference between bookkeepers and accountants
Role of bookkeepers in business
Bookkeepers are tasked with keeping your books balanced and compliant with local corporate laws. Their role requires understanding of legal deductions and double-entry bookkeeping methods, alongside strong organizational skills. Since bookkeepers have in-depth understanding of your financial position, they tend to assist with the preparation of income statements, balance sheets, cash flow statements, and statements of retained earnings at tax time.
Beyond this, bookkeepers perform the incredibly important task of managing your cash flow. They work to ensure you get paid on time - and that you pay your bills on time too. Budgeting, payroll, petty cash, and management of debt levels are also handled by your bookkeeper. So, when it comes to anything money-related in the day-to-day management of your business, your bookkeeper is on hand to help.
Bookkeeping is occasionally touted as an administrative task, but the high levels of reliability, responsibility, and curiosity that bookkeepers require is more comparable to that of para-professionals.
Benefits of using a bookkeeper for your business
Hiring a bookkeeper typically comes with the following benefits:
- less stress around tax time
- better structure regarding your business financials
- increased understanding of your cash flow and financial trends in your business
- awareness of key performance metrics, including revenue, costs, and profitability.
Role of accountants in business
Accountants check and analyze financial data provided by bookkeepers or business owners. From there, they produce reports that provide a detailed picture of the health of your business financials.
With all this information in mind, accountants are then in a position to guide your business in making complex financial decisions and forming business strategy.
This expertise extends to preparing business tax documents (and advising on tax strategy), as well as assessing and auditing financial reports. You might use the audit to determine or negotiate the value of a business investment or as required by the Canadian Government.
Benefits of using an accountant for your business
In terms of company tax returns, accountants tend to be cost-effective in terms of the hours you and your employees would need to invest in researching and preparing your own tax statements. Since your accounting fees are tax deductible, it certainly (usually) makes financial sense for businesses to hire an accountant.
Moreover, accountants reduce the stress associated with running a business by ensuring compliance and providing expert advice on financial matters. They can help you grow your business, reduce your tax liabilities, and plan for the future.