#016 Bookkeeping vs Financial Statements – Who does what?

Bookkeeping vs. Financial Statements – Who Does What?

Entrepreneur forums are used by many entrepreneurs looking for ways to do their jobs more efficiently. It is not uncommon to see exchanges between self-employed workers seeking to delegate the tasks that are most difficult for them, particularly accounting. Unfortunately, it is not uncommon for people without accounting qualifications (for issuing financial statements) or technical training (for bookkeeping) to offer their services, putting the accounting integrity of your company at risk. business.

Accounting is an essential function of your business and it is important to entrust your figures to someone who has real expertise. By doing this, you ensure that you obtain the correct portrait of your business and can then make informed decisions. Moreover, doing business with a professional could help you be more credible with your banker if you wish to negotiate new financing.

Additionally, an error in your recordkeeping could have unfortunate consequences if the government audits your records. You could, for example, have to pay a fine and penalties, in addition to having to pay a professional to rectify the error.

Here are the main elements differentiating bookkeeping professionals and accountants:

Bookkeeping professional (internal or external accountant)

Training

• Holds a DEC or BACC

Professional title

• Member of the Institute of Professional bookkeepers of Canada (IPBC) or technical training in bookkeeping

Usefulness for the entrepreneur

• Records daily financial transactions

Role and responsibilities

• Processing invoices, payments, receipts, ledgers, etc.
• Daily recording of credits and debits
• Execution of payroll-related tasks
• Preparation of financial statements for management purposes
• Reconciling multiple accounts and creating reconciliation reports
• Management of customer accounts and supplier accounts
• Preparation of tax reports (GST and QST, deductions at source)

Chartered Professional Accountant (CPA)

Training

• Holds a BACC, and often, an MBA

Professional title

• Member of the Order of Chartered Accountants

Usefulness for the entrepreneur

• Responsible for accounting and tax compliance

Role and responsibilities

• Consulting services and business strategy
• Preparation of financial statements. CPAs are the only professionals who can sign financial statements (notice to reader, review or audit mission) .
• Project audits
• Tax optimization
• Identification of business risks and recommendations

To ensure the expertise of the person to whom you entrust your figures, ask them if they are members of recognized organizations such as the Institute of Professional Bookkeepers of Canada (IPBC). This organization was created by accountants to help competent accountants gain recognition within the profession. The institute provides the necessary support to its members so that they can constantly improve their bookkeeping expertise, particularly through certification. IPBC members are required to have liability insurance and complete refresher training on an annual basis.

You can also ask your professional if they have the Certified Professional Accountant (CPA) designation. The CPA designation indicates that your accountant is a member of the Order of Chartered Professional Accountants. Therefore, he must comply with several requirements, such as having liability insurance and continuing to improve each year through a minimum of hours of continuing education. He must also make an annual declaration and pay a contribution, in addition to being verified by his own trustee.

Hiring a competent professional is an obvious choice. If you really want to delegate your accounting functions and save time safely, opt for a recognized professional and, above all, get references.

Hire professionals before thinking about saving a few dollars, which in the end could cost you dearly, not to mention the time and energy you'll have to spend redoing the work or arguing with the tax man!

About the authors

Christiane Constantineau has a DESS in corporate finance as well as an MBA for executives. She has more than 20 years of experience in financial strategy, both in Canada and abroad, and has participated in the financing and start-ups of several companies.

Simon Langlois worked for six years in audit at PwC where he had the chance to serve private and public companies. He also served as Poka's first employee and CFO for two years, where he assisted with sales, hiring and finances. Simon is a member of the Order of Chartered Professional Accountants and holds an MBA. Simon is President of Stamped.ai , a CPA firm for modern finance teams.