Both a bookkeeper and an accountant are evergreen careers that are always in demand in any industry. Both careers provide financial support and often work closely together to bring a company or individual closer to their financial goals. And both jobs utilize accurate, thorough, and well-organized information. But there are two main differences between the two positions. The first key difference is that each position works within different steps of the financial reporting process. The second difference is that each position works with varying elements of finance.
We explore the differences between the roles and required skills for both, as excerpted from Indeed.
Bookkeepers will strongly emphasize financial administrative and clerical tasks, such as organizing receipts and data entry. Below is a concise description of the primary duties most bookkeepers perform
- Recording every financial transaction in the general ledger by completing journal entries
- Recording income and account payments and depositing cash into the bank
- Organizing purchase receipts and invoices and managing both accounts payable and receivable
- Processing reimbursement requests and expense reports
- Calculating basic tax deductions and preparing for GST filing and submittal
- Managing payroll account and processing payroll for employees, including income tax, the Canada Pension Plan (CPP), and Employment Insurance (EI) deductions
- Ensuring all financial records meet provincial and federal documentation requirements
- Producing regular financial reports, such as an income statement, balance sheet, and cash flow statement
- Managing bank account reconciliations every month
An accountant analyzes those financial transactions entered by a bookkeeper to make educated financial decisions
- Producing regular financial reports, such as an income statement and balance sheet, if not completed by a bookkeeper
- Analyzing expenses and suggesting cost-savings opportunities or ways to increase deduction limits
- Filing year-end provincial and federal tax returns and supporting any audit requests
- Forecasting the outcome and impact of financial decisions, such as expansions, capital asset purchases, or investments
- Ensuring that the company or individual is compliant with all tax laws and regulations
- Adjusting incorrect or improperly coded journal entries
- Assisting with financial budgets, tax planning, and financial management advice
- Managing accuracy and validity of bookkeeping systems and procedures
- Creating economic models based on various situations and criteria
Required skills for both roles
Attention to detail
Accuracy is vital when dealing with numbers, costs, and financial data. A bookkeeper must have a critical eye to ensure general ledger coding is correct and that bank reconciliations are accurate to the penny. An accountant must notice small changes or patterns in financial records that can impact the financial health of an organization over the long term
Effective communication is critical to success in both positions, specifically written communication. A bookkeeper must have a firm grasp of the English or French language to understand invoices, accounting records, and other financial documentation. An accountant must be equally proficient in written communication, as they are often involved in financial reports and presentations to company stakeholders. Clear communication provides clear financial information.
Most companies and organizations use computerized accounting practices, whether on a Microsoft Excel spreadsheet or a third-party accounting software program. A bookkeeper must be comfortable using computer systems to record financial transactions. And an accountant uses these programs to look at the information to provide analysis and advice. Being competent in basic computer literacy is vital to the success of both professions.
Both a bookkeeper and an accountant require a high level of organization in their professional life. Managing receipts, transactions, records, and statements requires knowing where the information is and how to locate it quickly and efficiently. Organizational skills also support effective time management and the ability to prioritize.
Problem-solving is a practical and valuable skill for both professions. A bookkeeper needs to use problem-solving skills to fix journal entry discrepancies, find missing data to complete a bank reconciliation, and handle late invoices or accounts receivable payments. An accountant uses problem-solving skills when analyzing financial data to forecast an expansion, determine the best tax savings for a business, or develop cost-savings measures.
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