Are you looking for a consultant to oversee your business accounts? Would you like to optimize your tax strategy and pay less taxes? Do you want to avoid mistakes in your corporate taxes? These are the kinds of questions you need to ask yourself in order to find those experts who can help steer your business towards greatness.
That said, it’s not always easy to choose the right financial advisors for your business. And with good reason—the differences between an accountant and a tax expert are not obvious. Despite how easy they are to confuse, these professionals do not share the same goals or skills.
In this article, T2inc will explain the main differences between an accountant and a tax specialist.
Job description: accountant
Let's shed some light on these two professions by first defining the role and duties of an accountant and looking at what they can do for your company.
What does an accountant do?
By definition, an accountant handles all of a company's accounting. They analyze the business’s financial situation to create accounting budgets and tracks the company’s progress towards these goals.
The accountant’s role is to oversee the company’s books in order to determine their annual results and monthly balance sheets.
Accountants can work directly for a given company or work in an accounting firm. In general, accountants who work in a firm are specialists in a particular field, while accountants hired by a company perform a wide variety of tasks.
Accountant: main tasks and responsibilities
As previously mentioned, an accountant’s tasks and responsibilities will vary according to their work environment and specialization.
There are, however, certain tasks that make up the core of the accounting profession, including:
Bookkeeping
Bookkeeping involves rigorously monitoring a company's transactions to ensure that they are properly organized and classified.
Accountants keep a close eye on sales, purchased materials, salaries paid, etc. In short, they must keep track of all the company's cash inflows and outflows.
This is a crucial task because the provincial and federal tax authorities may ask to see certain statements or proof of financial transactions. It is therefore important to be able to easily provide this information and all relevant documentation.
Financial reports and analysis
Many accountants are also responsible for producing weekly, monthly, bi-annual or annual financial reports for their clients.
They may produce the statement of comprehensive income, the balance sheet, cash flow statements, and the numerous other documents that help managers develop new financial strategies according to their business objectives.
Other accountant tasks
Accountants can also be responsible for other tasks, including:
- Designing, implementing and overseeing accounting systems
- Processing payroll
- Preparing tax returns
- Evaluating internal controls
- Liquidating assets in the event of bankruptcy
Why good accountants are important for your business
Accountants play a key role in any business strategy. That being said, they do not often participate in the decision-making process and should not be hired uniquely for that role.
The better your relationship with your accountant, the more closely you can keep track of where you stand financially with your customers and suppliers and improve your cash flow.
As an entrepreneur, finding the right accountant is part of implementing a good business strategy. Alongside your accountant, you can make more informed, document-based decisions. You can also provide banking institutions proof of your company's financial health when you want to take out a loan. These accounting documents attest to your financial health and reassure banks about giving you a loan.
Focus on finding a Certified Professional Accountant (CPA) for your business. This title indicates that you’re dealing with a highly qualified accountant.
Job description: Tax expert
Now that you have a better understanding of what accountants do, let’s take a look at the roles and responsibilities of tax advisors.
What does a tax expert do?
Tax specialists are the main intermediary between the company and the tax authorities. When matters become contentious or bogged down in tax jargon, these experts help the company make the right decisions.
A true tax specialist has a comprehensive understanding of business tax regulations and uses their unrivalled expertise to help companies reduce expenses while respecting tax laws.
Tax expert: main tasks and responsibilities
To succeed in their role, corporate tax specialists may be tasked with:
- Tax planning when creating and setting up a company
- Tax planning for compensating executive shareholders
- Tax planning at the end of each fiscal year
- Representing the company before the tax authorities
- Challenging arbitrary notices of assessment from Revenu Québec or the Canada Revenue Agency
- Managing tax audits by tax authorities
- Filing corporate tax income (T2 and CO-17)
- …And much more!
Why tax experts are important for your business
Tax experts handle legal and tax-related matters and disputes. They are the best advisors when it comes to resolving any disputes your company may have with tax authorities.
These specialists also ensure that you follow provincial, national and even international tax norms to the letter. A tax advisor can work with an accountant to help your company reduce or defer corporate taxes.
If your goal is to optimize or reduce your taxes, you should enlist the aid of a tax specialist. With that in mind, choose an expert who has a thorough understanding of corporate tax law. They will use their expertise to set up the best possible tax system given your business’s legal structure.
T2inc: Canada’s trusted corporate tax and accounting partner
By now we hope you understand the differences, however slim, between accountants and tax specialists. More importantly, you should know who to turn to with your business needs, objectives and ambitions. After all, having people around you that you can count on is key to running a successful business.
T2inc offers turnkey tax solutions for business owners. We offer dedicated corporate tax software (T2 and CO-17), and corporate tax and accounting services to meet the needs of Quebec business owners. For the best in corporate financial advice, contact our experts today!
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
