The Difference Between a Bookkeeper and an Accountant
Updated: Oct 24
If you own a small business, you've probably heard the terms bookkeeper and accountant used interchangeably.
Both professionals work with financial information, and their responsibilities can overlap. However, they often serve different purposes in helping a business maintain accurate records, meet its obligations, and understand its financial position.
Knowing the difference can help you determine what support your business needs and when.
What Does a Bookkeeper Do?
A bookkeeper focuses on maintaining accurate, organized, and up-to-date financial records throughout the year.
Bookkeeping involves more than recording income and expenses. It includes reviewing transactions, reconciling accounts, identifying discrepancies, and maintaining the information needed for reliable financial reporting.
Depending on the scope of the engagement, a bookkeeper may help with:
Recording and categorizing financial transactions
Reconciling bank and credit card accounts
Maintaining accounts receivable and accounts payable records
Tracking GST and other applicable sales tax obligations
Reviewing transactions for errors, omissions, or inconsistencies
Preparing financial reports, including the Profit & Loss Statement and Balance Sheet
Organizing financial records and supporting documentation
Preparing bookkeeping information for year-end accounting and tax preparation
The main objective of bookkeeping is to maintain reliable financial records that reflect what is happening in the business.
When bookkeeping is completed accurately and consistently, business owners have a stronger foundation for understanding their financial information.
What Does an Accountant Do?
An accountant may use the financial records maintained throughout the year to prepare financial statements, address tax requirements, and provide specialized accounting or financial advice.
Accountants work in different areas, and not every accountant offers the same services.
Depending on their qualifications, specialization, and engagement, an accountant may assist with:
Preparing corporate income tax returns
Preparing year-end financial statements
Reviewing accounting adjustments and year-end balances
Providing tax planning and compliance advice
Advising on complex accounting matters
Performing assurance engagements, where appropriately licensed
Supporting financial planning and business decisions
Assisting with certain CRA matters
For incorporated businesses in BC, an accountant often plays an important role in corporate tax preparation and year-end reporting.
The main distinction is that bookkeeping maintains the underlying financial records, while accounting may involve additional analysis, reporting, tax, and specialized professional services.
These responsibilities are not exclusive to either profession, and the services provided depend on the individual professional.
Bookkeeper vs. Accountant: A Side-by-Side Comparison
Although bookkeepers and accountants both work with financial information, their responsibilities often differ.
Bookkeepers generally focus on maintaining accurate financial records throughout the year, while accountants may provide specialized services such as corporate tax preparation, year-end reporting, and financial advice.
The comparison below highlights some of their common responsibilities. The exact services depend on each professional's qualifications and engagement.
Do You Need Both a Bookkeeper and an Accountant?
For many growing incorporated businesses, working with both can be beneficial.
A bookkeeper helps maintain the financial records throughout the year. An accountant can then use those records for year-end accounting, corporate tax preparation, and other specialized services.
For example, imagine your business has completed a full year of operations.
If your bank accounts are reconciled, transactions are properly categorized, and outstanding invoices and bills are recorded, your accountant has a more reliable starting point for year-end work.
If those records are incomplete or contain significant errors, additional bookkeeping review or cleanup may be required before the accountant can proceed.
Accurate bookkeeping supports more efficient collaboration between your bookkeeper and accountant.
It also means that financial information can be useful throughout the year, rather than only when it's time to prepare a tax return.
Can Your Accountant Do Your Bookkeeping?
Yes. Some accounting firms provide ongoing bookkeeping services, while others focus primarily on year-end accounting, tax, or advisory work.
Similarly, some bookkeepers offer additional services such as financial reporting, cash flow support, or budgeting, depending on their qualifications and engagement scope.
The important question isn't simply which professional can perform a task.
It's whether your business has the right support to ensure that:
Financial transactions are recorded accurately
Accounts are reconciled regularly
Errors and missing information are identified
Financial reports are reliable
Tax and reporting responsibilities are addressed
Responsibilities between professionals are clearly defined
Having clear responsibilities helps prevent important tasks from being overlooked or duplicated.
What Should You Look for When Hiring a Bookkeeper?
Not all bookkeeping services provide the same level of support.
When choosing a bookkeeper, consider more than whether they can enter transactions into accounting software.
Professional qualifications and experience
Look for relevant training, practical bookkeeping experience, and a commitment to ongoing professional development.
In Canada, the Certified Professional Bookkeeper (CPB) designation is one professional credential that demonstrates a commitment to recognized bookkeeping standards.
Certification is not a universal legal requirement for providing bookkeeping services, but it can be a useful factor when evaluating a professional's qualifications.
A clear understanding of your business
Your bookkeeper should understand the type of business you operate and the bookkeeping requirements associated with it.
For incorporated businesses, this may include shareholder transactions, sales taxes, payroll, and maintaining records for corporate year-end reporting.
Accurate and consistent processes
Ask how transactions are reviewed, how accounts are reconciled, and how errors or unusual balances are addressed.
Bookkeeping should involve more than recording transactions. There should be processes for checking whether the information is complete and accurate.
Clear communication and responsibilities
Understand what services are included, what information you are expected to provide, and how questions or missing documents will be handled.
Clear expectations help both parties maintain an organized bookkeeping process.
Useful financial reporting
Financial reports are only as reliable as the information behind them.
A good bookkeeping process should support accurate reporting so you can better understand revenue, expenses, profitability, and your business's financial position.
What About the Cost?
The cost of bookkeeping and accounting services depends on several factors, including:
The volume and complexity of transactions
The condition of the existing records
The number of accounts and systems involved
The reporting and compliance requirements
The scope and frequency of services
Bookkeeping is often provided through a monthly engagement, while accounting services may be billed separately for year-end or specialized work.
However, pricing arrangements vary between professionals and firms.
Rather than comparing services based only on price, consider what work is included and whether it meets your business's needs.
Incomplete or inaccurate bookkeeping can create additional work later, regardless of which professional is responsible for correcting it.
How Bookkeepers and Accountants Work Together
The most effective arrangement is one where both professionals understand their responsibilities and can work from reliable financial information.
Throughout the year, the bookkeeper maintains the records, reconciles accounts, and helps identify bookkeeping issues.
At year-end, the accountant may review the information, prepare required adjustments, complete corporate tax work, and provide specialized guidance.
Communication between the two professionals is particularly important when dealing with year-end adjustments, shareholder transactions, or accounting treatments that affect future bookkeeping.
When these responsibilities are coordinated, the business benefits from more consistent records and a clearer financial picture.
Final Thoughts
Bookkeepers and accountants both play valuable roles in supporting a business's financial operations.
A bookkeeper focuses on maintaining accurate, organized financial records throughout the year. An accountant may provide additional expertise in tax, year-end reporting, and specialized accounting matters.
For growing incorporated businesses, these services often work best together.
At Golden Star Bookkeeping, our focus is on helping BC business owners maintain accurate bookkeeping records and access financial information they can understand and use.
Because every business's records and requirements are different, new clients begin with a paid Diagnostic Review. This allows us to assess the condition of the existing bookkeeping before recommending monthly services or any cleanup work that may be needed.
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