Who do you call when a letter from CRA shows up? Your bookkeeper or your accountant?
If you’re not sure, that’s fair. The two jobs overlap, and plenty of people use the words like they mean the same thing.
They don’t. And knowing the difference can save you money every year.
What’s the difference between a bookkeeper and an accountant?
Here’s the short version.
A bookkeeper keeps the books right every month. Every transaction recorded. Every bank account and credit card reconciled. Payroll run, GST filed, receipts matched, bills coded to the right job.
An accountant works from those books, mostly at year-end. Financial statements, your tax return, tax planning, and advice on how to set up the business.
Think of it like a job site. The bookkeeper is the crew doing the daily work. The accountant is the inspector at the end.
You want both. And the inspection goes a lot better when the daily work was done right.
What does a bookkeeper do for a trades business?
Month in, month out:
- Records and categorizes every transaction, so you know where the money went
- Reconciles your bank and credit card accounts, so the books match reality
- Runs payroll, with source deductions, remittances, T4s and ROEs
- Files your GST, and keeps the receipts that back up your input tax credits
- Tracks costs by job, so you can see which jobs made money
- Keeps subcontractor records, like WorkSafeBC clearance letters and the details you need for T5018 slips
- Sends you monthly reports you can actually read
None of that is year-end work. It’s every-month work. Fall behind on it, and it piles up fast.
What does an accountant do?
An accountant takes clean books and turns them into the year-end stuff:
- Financial statements for the year
- Your tax return, personal or corporate
- Tax planning, like how you pay yourself
- Reports for your bank, when you’re applying for a loan or line of credit
- Answers to the big questions, like whether it’s time to incorporate
And in BC, some of that work is reserved for CPAs.
What can only a CPA do in BC?
BC’s CPA Act reserves the titles “Chartered Professional Accountant” and “Professional Accountant” for members in good standing of CPABC and for registered firms.
It also restricts certain work to CPA members. That includes:
- Audits, with an auditor’s report
- Other assurance engagements, like reviews
- Compilation engagements, with a compilation engagement report
So if your bank wants compiled or reviewed financial statements, that’s a CPA’s job.
Why does that matter to you? Because a CPA’s report is only as quick as the books underneath it.
Hand your CPA a year of reconciled books and they get straight to the report. Hand them a shoebox and the clock starts on cleanup first.
Bookkeeping isn’t on that list. Which is why, when you hire a bookkeeper, you should ask what they actually know about your industry. A title won’t tell you.
Do you need both a bookkeeper and an accountant?
For most BC trades businesses with a crew or subs? Yes.
Here’s why. If nobody keeps the books during the year, your accountant spends year-end cleaning them up first. And you pay accountant rates for cleanup work.
Plus, you go the whole year blind. No idea which jobs made money until it’s too late to fix the pricing.
And when tax time comes, you’re making decisions about last year with numbers you saw for the first time last week.
So think of it this way. The bookkeeper is what it costs to know your numbers every month. The accountant is what it costs to get year-end and your taxes right.
Now, the honest answer for a tiny operation: if you’re a one-person outfit with a handful of transactions a month and you’re keeping up, do your own books and hand them to your accountant at year-end. That’s fine.
The time to bring in a bookkeeper is when the books start slipping, or when you can’t answer what each job made.
How do you know it’s time for a bookkeeper?
A few signs it’s time to hand the books off:
- You’re more than a month behind, and it keeps slipping
- A GST return went in late, or almost did
- You can’t say which jobs made money last month
- You’ve got a crew, and payroll eats your Sunday nights
- You’ve got subs, and nobody’s tracking WorkSafeBC clearance letters or T5018 details
- Your accountant’s year-end bill keeps going up, because they’re cleaning before they can start
One of those is a nudge. Three of them? That’s your answer.
What should you ask before you hire a bookkeeper?
Before you sign with anyone, us included, ask:
- Do you work with construction and trades businesses now?
- Do you know holdbacks, progress billing and WorkSafeBC?
- Will you track profit by job, or just sort expenses into categories?
- Who handles my T5018 slips?
- Will the same person work on my books every month?
- How do you work with my accountant at year-end?
- Is it a flat monthly fee, or billed by the hour?
A good bookkeeper answers all seven without blinking. If they have to look up what a holdback is, keep looking.
How should your bookkeeper and accountant work together?
Simple. The bookkeeper keeps everything current all year. At year-end, your accountant gets a clean package and does their part.
At MBC Canada, that’s how we work. We keep your books current every month. And with The Clean Books Year, we prep a year-end package for your accountant: reconciled books for the full year, with GST, payroll and sub payments in order.
Your accountant isn’t billing you to fix the books first. They’re working from books that are already right.
Want the bookkeeping side handled?
Trades and construction is our specialty. Teri and Adam bring more than 25 years of bookkeeping experience between them, and they know holdbacks, progress billing and WorkSafeBC.
Our bookkeeping starts at $800 a month, and here’s what decides your number. See what’s included on our services page, or book a free 30-minute call and we’ll look at your books together.