The Century-Old Question: do I need a Bookkeeper or Accountant?

In the age of DIY tax software and financial apps, the question of whether one needs a bookkeeper or an accountant is more relevant than ever, especially for new founders who haven’t dealt with a corporation before.

Let’s discuss the differences between them, when they are necessary, and the solutions we offer vs. our competitors. Understanding this can significantly impact your company’s cash flow, profits, taxes, and compliance.

What's a Bookkeeper?

Bookkeepers keep track of day-to-day financial transactions, such as invoices, purchases, and payments from customers. They organize and maintain your financial data, ensuring that every transaction is accurately logged in a timely manner. This is crucial for businesses of all sizes as it provides a clear picture of your company’s financial health.

Why should you care?

Time and time again we have seen clients who go down the DIY route with no foundational knowledge and end up seeing numbers that make no sense. Worse, they believe they are profitable but are far from it because they either owe suppliers or additional taxes, or they have not been paid from a customer, so there is no cash. Bookkeepers ensure you are seeing the proper, accurate numbers so you can make informed decisions going forward. A little goes a long way with good bookkeeping.

What’s an Accountant?

Taking it a step further, an accountant takes this information a step further by cleaning up the data, analyzing it for further tax saving strategies and helping you understand the numbers better. Accountants often have formal certification (such as a CPA in Canada) and use the information provided by bookkeepers to create financial statements and prepare your corporate tax return. Good accountants take it a step further and offer strategic financial advice to help your business grow and navigate complex financial situations.

Why should you care?

Similar to bookkeeping, clients go down the DIY route or worse, a “very affordable” accountant. Accountants are professionals that help you with your financial health, so picking the right one is important. Just like your Doctor helps you with your physical health, picking the most “affordable” one or doing it yourself may not be the best option in many cases.

When do you need them?

The decision to hire a bookkeeper or an accountant depends on several factors including the size of your business, the complexity of your financial transactions, and your own financial literacy.

• Bookkeeper: If you're just starting out or run a small to medium-sized business with relatively straightforward financial transactions, a bookkeeper might be all you need. They can help keep your day-to-day finances organized and up-to-date, which is crucial for making informed business decisions and preparing for tax season.
• Accountant: In order to file your corporate tax return, you should consider an accountant as they can take things a step further and ensure you remain compliant, get financial advice, tax planning and financial reporting to make better decisions in the year to come for your business.

How much do they cost?

The cost of a bookkeeper or an accountant varies based on location, complexity, and expertise, however the average rates for a bookkeeper is $40-$100 per hour and an accountant to complete your corporate tax return, HST return and payroll ranges from $1,500 to $4,000 per year.

At Blinc, we offer competitive pricing for both bookkeeping and accounting services along with helpful dashboards, reminders and an online platform to ensure you’re compliant throughout the year! Sign up today!

From founders to freelancers, investing in professional financial services like those offered by Blinc is not just an expense; it's an investment in your business's future success and compliance. Remember, the right financial guidance can be the difference between merely surviving and thriving in Canada’s business landscape!