Accountant vs. Bookkeeper: What’s the Difference?

Do you know differences between an Accountant and a Bookkeeper?

If you are running a business in Canada, you might need to work with both an accountant and a bookkeeper. While these two professions are often used interchangeably, there are some important differences between them.

Bookkeepers are responsible for recording and maintaining financial transactions, including accounts payable and accounts receivable, payroll, and bank reconciliations. They ensure that all financial transactions are properly recorded and categorized, and that financial statements are accurate and up to date.

On the other hand, accountants use the information provided by bookkeepers to provide higher-level financial analysis and advice to businesses. They are responsible for preparing financial statements, analyzing financial data, and providing tax advice to clients.

Here are some of the key differences between bookkeepers and accountants in Canada:

Education and Certification

In Canada, both bookkeepers and accountants are regulated professions, but the education and certification requirements for each are different. Bookkeepers generally have a college diploma or certificate in bookkeeping or accounting, while accountants have a degree in accounting or a related field and have obtained a professional accounting designation such as a Chartered Professional Accountant (CPA).

Scope of Work

The scope of work for bookkeepers is more limited than that of accountants. Bookkeepers are responsible for recording financial transactions and preparing financial statements, while accountants are responsible for analyzing financial data and providing advice on taxation, financial planning, and other business matters.

Level of Responsibility

Bookkeepers are responsible for ensuring that financial transactions are recorded accurately and in a timely manner. However, they do not have the same level of responsibility as accountants, who are responsible for ensuring that financial statements are accurate and comply with accounting standards and regulations.

Compensation

Because of the differences in education, certification, and scope of work, accountants generally earn more than bookkeepers. According to the latest data from Statistics Canada, the average annual salary for bookkeepers in Canada is around $45,000, while the average annual salary for accountants is around $80,000.

Advancement Opportunities

While bookkeeping is a valuable skill, there is generally less opportunity for advancement in the profession than there is in accounting. Accountants can advance to more senior positions within their firms or organizations and can eventually become partners or owners of accounting firms.

While both bookkeepers and accountants play important roles in ensuring the financial health of businesses in Canada, there are significant differences between the two professions. If you are a business owner, it's important to understand these differences so that you can make informed decisions about which professional to work with based on your needs and budget.

If you have more questions about how working with a Bookkeeper can help your business, contact us today.