What Skills Do I Need to Become a Bookkeeper?
Technological change is expected to reduce demand for these workers. Software innovations, such as cloud computing, have automated many of the tasks performed by bookkeepers. As a result, the same amount of bookkeeping work can be done with fewer employees, which is expected to lead to job losses for bookkeepers over the next 10 years. Bookkeeping, accounting, and auditing clerks need to be comfortable using computer spreadsheets and bookkeeping software.
bookkeeping is where accountants generally start their careers as the barriers to entry are lower and pay is decent. Although they are job titles used interchangeably, bookkeepers and accountants are different positions with different requirements. Your business is subject to audits from a variety of entities, especially the IRS. Who gathers all the records and financial data needed to satisfy auditors?
There is plenty of opportunity for consistent work if you take this route. Lots of small businesses need help with payroll management and other bookkeeping duties but aren’t able to bring on a full-time employee. After you’ve worked as a bookkeeper for at least two years, you can become a Certified Bookkeeper through the American Institute of Professional Bookkeepers. Knowing how to use programs like a pay stub generator is also helpful in making you a valuable bookkeeper.
Finance & Accounting Services Articles: Our finance & accounting services resources are comprehensive, informative, and well-researched.
Bookkeepers also make sure to maintain accurate foreign currency accounts, utilising current exchange rates. This can be made much easier with compatible digital bookkeeping apps that can instantly analyse exchange rates without wasting much time. Another big responsibility of bookkeepers is that they prepare invoices and send them to your clients so you can receive payment on time. Managing the accounts receivable ledger is also likely to be done by a bookkeeper – as well as chasing up late payments so your records are always accurate.
This process of transferring summaries or individual transactions to the ledger is called posting. Once the posting process is complete, accounts kept using the “T” format undergo balancing, which is simply a process to arrive at the balance of the account.
For those looking to develop and assume managerial positions, a Master’s of Business Administration (MBA) incorporates elements of management and leadership skills as well as accounting theory and practice. Consider a bookkeeping degree at the certificate or associate’s level.
Bookkeeping, accounting, and auditing clerks may work longer hours to meet deadlines at the end of the fiscal year, during tax time, or when monthly or yearly accounting audits are performed. More advanced accounting clerks may add and balance billing vouchers, ensure that account data are complete and accurate, and code documents according to an organization’s procedures. Accounting clerks typically work for larger companies and have more specialized tasks.
Certification for experienced bookkeepers is available through the American Institute of Professional Bookkeepers. These programs will teach you how to record costs, value inventory, calculate depreciation, analyze financial statements, and use software programs. Courses will cover topics in QuickBooks, Microsoft Excel, bookkeeping, business math, and payroll administration. Bookkeeping involves keeping track of a business’s financial transactions and making entries to specific accounts using the debit and credit system. Every accounting system has a chart of accounts that lists actual accounts as well as account categories.
For example, all credit sales are recorded in the sales journal; all cash payments are recorded in the cash payments journal. In the single entry system, each transaction is recorded only once. Most individuals who balance their check-book each month are using such a system, and most personal-finance software follows this approach.
That first client was all I needed to gain the confidence to get my next client, which came a few weeks later. Since you’re dealing with someone else’s private and sensitive data as a bookkeeper, you should also get insurance to protect yourself and your company should mistakes or catastrophe happen. You may wish to get business liability coverage, professional liability (errors and omissions) coverage, valuable papers and records coverage, data breach coverage, etc. While bookkeeping is absolutely a business you can start without any experience, it definitely helps to have previously worked in a money-related job. Whether you’ve worked as a small-scale accountant or as a company’s controller, that experience will go a long way in landing clients for your own business.
Most high-level bookkeepers have at least an Associate’s or bachelor’s degree. Bookkeepers typically keep the financial records for an organization. They work in offices and use a variety of office equipment and computer programs.
- Once you have the skills and knowledge to be a great bookkeeper, it doesn’t stop there.
- As small- business writer Joshua Adamson-Pickett explains, it not only helps you make solid decisions now and plans for your company down the road, an efficient bookkeeping system saves time.
- That’s where bookkeepers come in, as they can help make sure your business stays aligned with the relevant laws.
- As the business owner, if you don’t understand the different types of “accounts” your bookkeeper uses to organize your finances, measuring the success (or failure) of your efforts will be futile.
- Lots of small businesses need help with payroll management and other bookkeeping duties but aren’t able to bring on a full-time employee.
- Specializing in growing industries such as health care, insurance, hospitality, or financial services also widens career opportunities.
It’s important to understand that the role of the bookkeeper is relied upon by other areas of the company, and the company’s’ financial records are at stake. Being able to say that you will take on a project and complete it within a timeframe specified means that you can be reliable in your position. Many business owners think bookkeeping is a dreaded chore, but if you understand and effectively use the data your bookkeeper collects, bookkeeping can be your best ally.
Intuit, the maker of QuickBooks, offers easy to follow video tutorials for small businesses and accountants that use the software. And that makes having a solid understanding of how the software works a quintessential skill for small business owners and many accountants. Learn about the essential numerical skills required for accounting and bookkeeping. This free course, Introduction to bookkeeping and accounting, explains the fundamental rules of double-entry bookkeeping and how they are used to produce the balance sheet and the profit and loss account.
Look at postings for jobs near you and find out if that’s the case for businesses in your area. If so, it might be worth the investment to go back to school so that you can make yourself more marketable. Many bookkeeping and accounting offices are willing to let high school or college students work part-time as interns.
It also provides detailed, accurate, and timely records that can prove invaluable to management decision-making, or in the event of an audit. A chronological record of all transactions is kept in a journal used to track all bookkeeping entries.
Mid-size and small public accounting firms pay, on average, about 10% less than the Big Four. If you choose to work for a company internally instead of doing public accounting, the starting salary range is very broad. In most cases, private companies do not pay more than the Big Four for young accountants with little experience. Accountants, though not formally required to do so, traditionally acquire their CPA certification as well as their Master’s degrees.
Continued educational and vocational training in bookkeeping, accounting, or business administration offers bookkeepers the opportunity to become accountants or auditors. Specializing in growing industries such as health care, insurance, hospitality, or financial services also widens career opportunities. Typically, these courses require practice at maintaining financial records both manually and using computer programs. You should also take general business and management courses if you want to achieve higher level positions in your career. These courses will also be helpful if you choose to open your own bookkeeping or auditing firm.
That’s where bookkeepers come in, as they can help make sure your business stays aligned with the relevant laws. Producing invoices, chasing payments, getting you ready for tax deadlines and processing payroll. These are just some of the things bookkeepers do for small businesses. Bookkeepers are needed everywhere, but the highest pay for those without a bachelor’s or master’s degree is found in government agencies.
What’s a Typical Day for a Bookkeeper?
To keep up to date with many changes and updates that happen in this field of work, you should have an interest in learning more about the position and furthering your education when the opportunity arises. This may be in the form of short courses, or even a degree to become an accountant. You may also want to explore mentoring options as a means of gaining more hands-on experience. Wanting to work well and understand more will only work to improving your career prospects in the long run.