What is bookkeeping? What are the responsibilities, and how can one become a bookkeeper?

Bookkeepers oversee a company’s financial accounts, ensuring their accuracy and facilitating simple scrutiny. Their work is crucial for the efficient functioning of a prosperous firm, which may involve a significant number of transactions on a daily, weekly, monthly, quarterly, or yearly basis.

If you possess a meticulous nature and derive satisfaction from working with numerical data, you may want to contemplate pursuing a profession as a bookkeeper.

This page provides information on the responsibilities of bookkeepers, their significance to businesses, and their earning potential. In addition, you will investigate the process of becoming a professional in this field and discover recommended, affordable courses that will assist you in acquiring job-specific abilities promptly.

Bookkeeping refers to the systematic recording, organizing, and maintaining of financial transactions and information in a business or organization.

Bookkeeping is the systematic compilation and recording of a company’s financial events. These services encompass the documentation of financial inflows and outflows in a firm, including client payments and vendor payments. Previously, bookkeepers would document this information in tangible books, but nowadays, the majority of the process is managed by digital software.

Bookkeepers are required by nearly every industry and firm, regardless of their size.

Were you aware?

The profession of bookkeeping originated in the 15th century with the Italian mathematician Frater Luca Pacioli, who is considered the pioneer of modern bookkeeping. He documented various accounting techniques and instruments that are still in use today, such as double-entry bookkeeping.

Categories of bookkeeping

Bookkeepers engage in a diverse range of bookkeeping tasks. Single-entry bookkeeping and double-entry bookkeeping.

Single-entry bookkeeping consolidates all transactions into a single row. Single-entry accounting is commonly used to record and monitor cash transactions, taxable income, and expenses that can be deducted for tax purposes.

Double-entry bookkeeping entails the recording of all transactions in two instances, typically by a debit and a credit entry. Double-entry bookkeeping commonly uses accrual accounting to record and track obligations, equities, assets, costs, and revenue.

While single-entry bookkeeping is less complex, double-entry bookkeeping is more comprehensive and less prone to errors.

What distinguishes a bookkeeper from an accountant?

Both accountants and bookkeepers have the responsibility of ensuring the accuracy of financial records, and there are instances where both names are used interchangeably. Typically, bookkeepers concentrate on administrative duties such as finalizing payroll and documenting incoming and exiting cash. Accountants assist organizations in comprehending the broader perspective of their financial circumstances.

While an accountant is capable of carrying out bookkeeping duties, the designation typically encompasses additional obligations. An accountant analyzes the financial data compiled by a bookkeeper to evaluate the financial condition of a company. In addition, they may conduct audits and compile tax returns. Obtaining a career as an accountant typically necessitates a greater amount of training and education compared to bookkeeping and can serve as an advantageous progression in your financial profession.

What does a bookkeeper do?

Generally, a bookkeeper does what the business needs them to do. Perhaps you are employed at a big corporation, work for yourself as part of the gig economy like thousands do, or own your own small business. You might also do this kind of work on the job:

• Record transactions in accounting software (e.g., Quicken), databases, or spreadsheets.
• Consolidate all of your financial records, including cash flow statements, bank documents, and loss statements.
• Create invoices and accept payments from clients.
• Debit and credit accounts with the help of trackers
• I agree with the financial statements.
• Balance sheets and income statements.
• Review reports for accuracy.
• Complete payroll
• File business tax returns.

How to become a bookkeeper

Being organized and good with numbers would make you a suitable candidate for a job as a bookkeeper. How to gain the skills you need to start your career.

• Take a bookkeeping course.

A bookkeeping course can give you the fundamental knowledge to create or record financial reports, organize data with tools such as MS Excel, or even help you understand how to balance books.

For example, the Intuit bookkeeping professional certificate on Coursera is done in collaboration with an industry leader and provides you with a credential that can be added to your resume.

There are different types of accounting jobs, and not all require an advanced degree, but there may be some employers that would rather hire someone with coursework in accounting.

• Obtain a bookkeeping certification.

While it is not required to be certified, becoming a bookkeeper with certifications can communicate that you have the professional training and knowledge employers are looking for. Once you have graduated, as well as gained additional experience in this field on the job, to obtain the Certified Bookkeeper designation, you must enroll in the American Institute of Professional Bookkeepers.

• Establish important bookkeeping capabilities.

While you study and go about becoming bookkeeping certified, make sure to also gain some important skills that will be crucial in your career as a bookkeeper, which are covered here:

Technical skills:

• Debits and credits
• Invoicing
• Billing
• Vendor relations
• Accounts payable
• Accounts receivable
• Data entry
• Spreadsheets
• Payroll
• Financial statements
• Bank reconciliation
• Accounting software

Workplace skills:

• Organization
• Communication
• Time management
• Attention to detail
• Error correction
• Decision making
• Critical thinking
• Interpersonal skills

Consider earning a degree.

While a two-year or four-year degree isn’t always required for bookkeeper employment, some companies may require candidates to have obtained one.

While it is possible for job prospects to find work in bookkeeping without an advanced degree, some jobs require a diploma, associate’s degree, or bachelor’s degree and will likely earn more than those with just high school diplomas based upon the type of field entered. A degree can fuel you to become an accountant or play a role within a business, as it helps.

In conclusion,

Your bookkeeper plays a very critical role in your business. By relying on their experience and skills, your bookkeeper makes certain that financials are both up-to-date and accurate. Besides, they check for probable faults. But as you noticed, a bookkeeper can help in other areas of your business, such as payments, billing, or payroll. Recognizing what a bookkeeper can do and not do will help you identify the needs of your business, including which roles a bookkeeper might meet.

Frequently Asked Questions

Do bookkeepers perform financial planning and budgeting?

Bookkeepers are responsible for keeping a record of financial transactions and providing updated information about the business. Typical tasks for a bookkeeper include recording transactions, creating and sending invoices, preparing tax returns, and managing budgets and forecasts.

What system does a bookkeeper use?

Your business model will likely necessitate a variety of software options. Diverse Payment Application Compatible: QuickBooks is interoperable with many of the payment applications and offers diversity.

How do bookkeepers keep your data confidential and safe?

It is the responsibility of your bookkeeper to establish employee access levels, implement multi-factor identification, and insist on its routine use among workers. Secure password generation with regular updates must be followed by encrypting sensitive data and running backups. Just as having antivirus software in place is a necessity, setting up a VPN can confirm that financial documentation and security protocols are established correctly going forward.

Bookkeepers: How do I typically obtain qualifications or certifications?

These are subject to change based on the needs of your organization. Overall, a bookkeeper will retain their bachelor’s degree in accounting, finance, or relevant experience previously completed for bookkeeping purposes. In addition to their ability to apply accounting standards and frameworks, they should have knowledge of industry benchmarks, etc.

Independent or collaborative bookkeepers?

Bookkeepers may work solo or as part of a team, working either in-house if you use an employed bookkeeper, on staff for freelance or self-employed jobs, or remotely via online bookkeeping services.