The distinctions between accounting and bookkeeping are subtle yet essential when considering a career in either field. For some, starting as a bookkeeper can be great to gain experience for those starting out. Some companies will hire individuals with no formal education to do their bookkeeping if they have the experience to prove their skills, while others require the completion of an accounting program or QuickBooks training. On the other hand, to get into accounting you must have at least a certificate in accounting to get started.
To start, bookkeepers record the day-to-day financial transactions, while accounts focus more on the big picture through interpreting, classifying, analyzing, reporting, and summarizing the financial data. Bookkeepers and accountants work well together and since they have different scopes there will always be a need for both.
Duties of a Bookkeeper
As I mentioned, bookkeepers record the daily transactions in a proper and systemic way, and they are essential to identifying, measuring and recording the financial information needed to run a successful business. Bookkeeping duties include:
- Recording financial transactions
- Recording income and account payments and depositing cash into the bank
- Producing regular financial reports, such as an income statement, balance sheet, and cash flow statement
- Organizing purchase receipts and invoices and managing both accounts payable and receivable
- Calculating basic tax deductions and preparing for GST filing and submittal
- Maintaining and balancing subsidiaries, general ledgers, and historical accounts
- Completing payroll
Bookkeepers provide specialized accounting advice to their clients, often in partnership with an accountant, to present options and solutions to help Canadian businesses grow and succeed.
Duties of an Accountant
While accounting is a high-level process that produces financial models using financial data compiled by a bookkeeper or business owner. Many small businesses will only have an accountant on hand during tax season but may have a full-time bookkeeper. Accounting duties include:
- Adjusting incorrect or improperly coded journal entries
- Filing year-end provincial and federal tax returns and supporting any audit requests
- Analyzing expenses and suggesting cost-savings opportunities or ways to increase deduction limits
- Forecasting the outcome and impact of financial decisions, such as expansions, capital asset purchases, or investments
- Managing accuracy and validity of bookkeeping systems and procedures
- Creating economic models based on various situations and criteria
Another area that accounting differs from bookkeeping is that accountants can specialize in a specific field. Since bookkeepers tend to stick to the day-to-day duties of a business, there isn't really any room for specialization. Accountants can specialize in forensic accounting, investment accounting, government accounting, project accounting, auditing, and much more.
Shared Skills of Bookkeepers and Accountants
The skills and competencies of accountants and bookkeepers overlap, and they use the same skills in different situations. Listed below are five skills that accounting and bookkeeping share:
- Attention to detail and accuracy are vital when dealing with numbers, costs, and financial data.
- Communication skills both to understand documents and to present solutions and findings.
- Computer literacy as the basis of both roles is the use of software and excel sheets.
- Organization of all financial records, receipts, statements, knowing where it is and how to locate the information quickly and efficiently.
- Problem-solving is a practical and valuable skill for both professions, from finding missing data to determining the best tax savings strategies for a business, you will spend a lot of the day problem-solving.
Whether you decide to go into bookkeeping or accounting, your first step is to take some online accounting courses and learn about different accrediting bodies including Certified Professional Bookkeepers of Canada, the Canadian Bookkeepers Association, and CPA Canada. A career in bookkeeping or accounting is sure to be a promising and fulfilling venture.
Disclaimer
The information contained in this post is considered true and accurate as of the publication date. However, the accuracy of this information may be impacted by changes in circumstances that occur after the time of publication. Ashton College assumes no liability for any error or omissions in the information contained in this post or any other post in our blog.
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