"Do I need a bookkeeper or an accountant?" It's one of the most common questions Canadian small business owners ask — and the honest answer is that most businesses need both, at different times and for different jobs.
Here's how a bookkeeper and an accountant differ in Canada, and how to decide what your business needs.
The short answer
| Bookkeeper | Accountant | |
|---|---|---|
| Main job | Recording and organizing transactions | Interpreting, reporting and tax |
| How often | Weekly or monthly | Monthly, quarterly or at year-end |
| Typical tasks | Data entry, reconciliations, AP/AR, payroll records | Adjusting entries, financial statements, tax returns, planning |
| Designation | Not required | CPA designation for public accounting services regulated by the province |
| Main question answered | "What happened?" | "What does it mean, and what should we do?" |
What a bookkeeper does
A bookkeeper keeps your financial records accurate and current:
- Recording sales, expenses and transfers
- Categorizing transactions in your accounting software
- Reconciling bank and credit card accounts every month
- Managing invoices and bills
- Recording payroll and tracking source deductions
- Tracking GST/HST collected and paid
- Keeping receipts and documents organized
Good bookkeeping is what makes everything else possible. Without it, your accountant spends billable hours cleaning up instead of advising.
What an accountant does
An accountant builds on the bookkeeper's records:
- Reviewing the books and making adjusting entries — depreciation (capital cost allowance for tax), accruals and prepaid expenses
- Preparing year-end financial statements
- Preparing and filing tax returns, including the T2 corporate return
- Planning: salary vs dividends, timing of expenses, the small business deduction and instalments
- Handling CRA correspondence, reviews and audits
- Advising on structure, growth and financing
What about CPAs?
In Canada, Chartered Professional Accountants (CPAs) are regulated by provincial bodies such as CPA Ontario. A CPA designation requires education, a professional exam and practical experience. Public accounting services such as audits and review engagements must be performed by licensed public accountants, under provincial rules.
Not every accounting task requires a CPA, but for year-end statements that lenders rely on, complex tax planning or CRA disputes, a qualified professional matters.
Which does your business need?
You need a bookkeeper if...
- You have regular sales and expenses to record — which is almost every business
- You're registered for GST/HST and file returns
- You run payroll
- You want to know where your money is going every month
You need an accountant if...
- You're incorporated and must file a T2 return — required every year for resident corporations, even with no tax payable
- You need year-end financial statements for a bank, investor or partner
- You want to plan taxes before year-end, not just report them
- You've received a CRA review, audit or reassessment
- You're deciding whether to incorporate, expand or restructure
You probably need both if...
You're an incorporated business with employees and GST/HST obligations. The bookkeeper keeps the records current all year; the accountant uses those records to prepare statements, file returns and plan ahead.
How much does each cost?
Bookkeeping is usually billed monthly or hourly, based on transaction volume. Accounting and tax work is often priced per engagement — year-end statements and a T2 return, for example — or included in a broader monthly package. When the books are clean, accounting work takes less time and costs less.
A combined approach
Many businesses now use a single provider for both: monthly bookkeeping, with accountants handling the close, reporting, year-end and tax. That avoids gaps between two separate firms and means the people preparing your return already know your books.
Bookkeeping and accounting with ADYZER
ADYZER's outsourced bookkeeping service keeps Canadian businesses' records current every month, in the software you already use. Our outsourced accounting team adds month-end close, reporting and tax preparation, and our corporate tax specialists prepare and file T2 returns, including planning for the small business deduction.
Not sure which you need? Contact us and we'll recommend the right mix for your business.