A bookkeeper records and reconciles your business’s money as it moves, month by month, so you always know where you stand. An accountant uses those records to prepare tax returns and financial statements, plan your taxes, and advise on bigger decisions. Most small businesses need a bookkeeper all year and an accountant at least once a year, and the two work best as a pair.
What a bookkeeper does
Bookkeeping is the day-to-day record of your business. It is steady, detailed work, and it is what everything else is built on.
A bookkeeper typically:
- records sales, expenses and transfers in your accounting software
- reconciles every bank and credit card account against its statement, so the books match reality
- categorizes transactions consistently, so your reports mean something
- tracks what customers owe you and what you owe suppliers
- prepares GST/HST returns from the books, if that is part of the engagement
- runs payroll and remittances, if that is part of the engagement
- produces monthly reports, such as a profit and loss statement and a balance sheet
- keeps the file organized and ready for your accountant at year end
The value is in the consistency. A bookkeeper who closes your books every month catches a missing receipt or a duplicated charge while it is still easy to fix, not eleven months later.
That is the work we do at Salty Sea. Our monthly bookkeeping covers reconciliations, categorization, reporting and, depending on the package, GST/HST filing and payroll, in QuickBooks Online, Xero or Sage.
What an accountant does
An accountant works mostly with the finished picture. Where a bookkeeper asks “is every transaction recorded correctly?”, an accountant asks “what does this mean, and what should you do about it?”
Depending on their training and licence, an accountant may:
- prepare year-end financial statements
- prepare and file corporate income tax returns
- plan taxes, including how an owner pays themselves
- advise on whether and when to incorporate
- deal with the Canada Revenue Agency on reassessments, audits and disputes
- perform review or audit engagements when a lender, investor or funder asks for one
Some of these are regulated. In British Columbia, assurance engagements can be signed off only by appropriately licensed members of CPABC, the professional body for CPAs in the province. A bookkeeper cannot do that work, and an honest one will not try.
The CPA designation in Canada
“Accountant” is a broad word. The designation to look for is CPA, Chartered Professional Accountant. It replaced the older CA, CGA and CMA designations, which some longer-serving members still show alongside it, and each province has its own CPA body.
In BC that body is CPABC, and the rules on who may use the title are clear. CPABC states that non-members are not permitted to use the CPA designation, and that a CPA from another province cannot use it in BC unless they are also a CPABC member. If someone calls themselves a CPA here, you can expect them to be regulated here.
Two practical points follow from that:
- A bookkeeper is not a CPA unless they are a member. If the title matters for the work you need, ask.
- Not every CPA does the same work. Some work inside companies, some in public practice. If you need corporate tax returns or a review engagement, ask whether that is a service they offer.
Salty Sea is a bookkeeper. We are not a CPA firm or an accounting firm, and we do not offer financial statement audits, reviews or other assurance engagements. We do act as authorized CRA representatives for our clients, including through CRA audits and reviews of GST/HST, payroll and income tax, and we bring in your accountant where specialized tax expertise is needed. Caleb, who leads our bookkeeping, has five years of hands-on experience supporting small businesses and is pursuing a Bachelor of Business Administration, majoring in Accounting, at Vancouver Island University. We would rather say that plainly than let anyone assume otherwise.
Which one does your business need?
The honest answer depends on how your business is set up and what stage it is at. Here is how we would think about it.
When a bookkeeper is the main need
- You have more transactions than you can comfortably keep up with yourself.
- You are registered for GST/HST and want returns prepared from reconciled books, not a shoebox.
- You have staff and need payroll and remittances handled on time.
- You want monthly numbers you can actually make decisions with.
- You are behind and need the books brought up to date before anything else can happen.
In all of these, the work is in the records. An accountant can do bookkeeping too, but you would usually be paying accounting rates for it. For a sense of what bookkeeping costs and why, see our guide to how much a bookkeeper costs in Canada.
When you need an accountant
- You are incorporated and a corporate tax return is due.
- You are deciding whether to incorporate, or how to pay yourself from a corporation.
- A lender, landlord or funder has asked for reviewed or audited financial statements.
- You are disputing a significant reassessment, or one that turns on corporate income tax or tax law.
- You are buying, selling or restructuring a business.
These are planning and advice questions, and some carry legal and tax consequences that are hard to undo. They belong with an accountant. We will say so when a question reaches that point, rather than guess.
When you need both
Most incorporated small businesses fit here. The bookkeeper keeps the records current through the year. The accountant comes in at year end, and whenever a decision needs tax advice.
A sole proprietor with simple affairs may lean more on a bookkeeper and file a personal return. If that is you, personal returns are a separate service of ours, covered on our personal tax page.
How a bookkeeper and an accountant work together at year end
Year end is where the split between the two roles matters most, and where a good handoff saves the most time and money.
Every resident corporation, with a few exceptions such as registered charities, must file a T2 corporation income tax return. The CRA says to file it within six months of the end of each tax year. For a March 31 year end, that means September 30.
Here is how the work usually divides.
The bookkeeper’s part, before the handoff:
- Close the final month and reconcile every bank, credit card and loan account to its statement.
- Clear up uncategorized transactions and anything sitting in a suspense account.
- Make sure GST/HST returns filed during the year agree with the books.
- Confirm payroll totals agree with what was remitted and reported.
- Give the accountant access to the file, plus the supporting statements and documents they ask for.
The accountant’s part, after it:
- Review the books and post year-end adjustments, such as amortization, accruals and shareholder entries.
- Prepare the financial statements.
- Prepare and file the corporate tax return.
- Advise on anything the year has raised, from owner pay to instalments.
Then the loop closes. The accountant’s adjustments go back into the bookkeeping file so next year starts from the right opening balances. Skip that step and the books drift away from what was filed.
At Salty Sea, this is exactly how we work. We keep the books, and corporate tax returns go through the accountant the business keeps on retainer. They are quoted separately from our bookkeeping. If you already work with an accountant, we work alongside them. Our services page shows what sits on each side of that line.
What a clean handoff saves you
When the books arrive at year end already reconciled, an accountant spends their time on adjustments, tax and advice, which is what you hired them for. When the books arrive messy, they spend it on clean-up first, and that time is usually billed at accounting rates.
If you are months behind, fix that before year end rather than during it. Our guide on how to catch up on bookkeeping walks through how.
Questions to ask before you hire either one
For a bookkeeper:
- Which software do you work in, and will I own the file?
- What happens each month, and when will I see reports?
- Is GST/HST filing included? Payroll?
- How will you hand off to my accountant at year end?
For an accountant:
- Are you a CPA, and are you licensed for the work I need?
- Will you file my corporate return, and what do you need from my bookkeeper?
- How do you charge for year-end work and for advice during the year?
- How do you prefer to receive the books?
The answers tell you whether the two will fit together. When they do, you get accurate records all year and a year end with no surprises.