Bookkeepers play an important part in any successful business. They keep financial records organized, monitor the company’s finances, and offer financial insights that guide important business decisions. If you’re detail-oriented, good with numbers, and want to help guide a business to success, becoming a bookkeeper might be the perfect fit for you.
What does a bookkeeper do?
A bookkeeper’s day-to-day can look different depending on the industry and company size, but the main responsibilities usually include:
Data entry
There’s a common misconception that data entry only involves putting numbers into spreadsheets. It’s much more than that – by analyzing that data, we can get a good picture of a company’s financial health. With data entry, bookkeepers can categorize income streams, track expenses, and record all transactions.
Data entry is important because without it, we can’t paint a picture of a company’s finances.
Account reconciliation
An important part of a bookkeeper’s job is making sure bank statements and internal records match up. Bookkeeper’s need to be very accurate with accounts to spot any mismatches.
Payroll processing
Employees rely on bookkeepers to get their paychecks on time and trust they’re done properly. Bookkeepers calculate salaries, deductions, taxes, and make sure everyone in the business is being paid.
Financial reporting
Bookkeepers turn raw data into financial reports which can paint a good picture of the company’s financial health. Breaking down complex financial information into actionable insights helps inform business decisions.
Bill payment
Bookkeepers are responsible for managing accounts payable and making sure that bills get paid on time. Keeping on top of the bills is one of the ways that bookkeepers help companies maintain a healthy cash flow.
Accountant vs. Bookkeeper: What’s the difference?
While bookkeeping and accounting are similar in many ways, there are some key differences between them:
Bookkeepers
Think of bookkeepers as the data organizers. They keep tabs on a company’s income and expenses, making sure everything is accurate and categorized. They also match bank statements to double-check that the company’s records match the bank’s records. In short, bookkeepers keep a clean and detailed record of the company’s money coming in and going out.
Accountants
Accountants are the financial detectives. They take all the data collected by the bookkeeper and use it to understand the bigger picture. Accountants analyze trends and see where a business can improve its finances. They also write reports that explain everything in an easy-to-understand way. Accountants also help businesses with things like taxes, and give advice on how to save money.
Skills and qualities required for a bookkeeper
Here are some skills and qualities that anyone who wants to become a bookkeeper should have:
Organization
Bookkeepers work with a lot of financial information, so organisation is essential. All the financial data should be documented accurately and follow a system. This allows for easy retrieval of the data whenever needed.
On top of organizing data, bookkeepers also need to manage deadlines. Bills have to be paid on time, reports written regularly, and taxes filed by specific dates. Strong organizational skills helps bookkeepers stay on top of these deadlines. Missing deadlines can lead to penalties and costly disruptions.
Great with numbers
Bookkeepers are always working with numbers. It’s the main part of the job. Bookkeepers often need to use complex financial formulas. Each calculation must be accurate, and there is no room for errors. Financial errors can be costly and land the company in hot water. It’s important for bookkeepers to have strong skills in math and an eye for spotting errors.
Strong communication skills
Even though working with numbers is the main part of bookkeeping, the data needs to be explained. Bookkeepers need to explain their financial findings to others in the business. It’s important that the technical jargon is communicated in an easy to understand way.
Computer skills
Bookkeepers usually maintain a company’s financial records on a computer. This requires tech knowledge. Luckily, there’s user-friendly bookkeeping softwares out there, like Bookipi, that can simplify things. Bookipi makes invoicing, a big part of bookkeeping, super easy to manage. You no longer have to create invoices from scratch when you use Bookipi’s free invoicing software.
Accuracy
Having a good eye for detail is important for any bookkeeper. You’ll be responsible for analyzing financial data and spotting any inconsistencies. Bookkeepers go through financial records and make sure all calculations are correct. Even minor mistakes can cause huge problems with the company’s finances. It’s important for bookkeepers to always be accurate with their work. Take advantage of Bookipi’s free expense tracking app so you have one less thing to worry about.
How to become a bookkeeper
The world of bookkeeping offers several exciting pathways to launch your career. Here’s a closer look at the most common options for becoming a bookkeeper:
1. Certificate or diploma in bookkeeping:
Studying bookkeeping formally is a great way to learn the foundations of bookkeeping. These programs usually cover all the main principles of accounting and bookkeeping. They also offer a more thorough understanding of the subject. Completing a course is a straightforward path to becoming an accredited bookkeeper. Many community colleges, technical schools, and educational institutions offer these programs.
2. On-the-job training:
Many entry-level bookkeeping positions offer on-the-job training. This allows you to gain practical training in bookkeeping while earning a salary. This hands-on approach lets you learn from experienced professionals. You can also apply your newfound knowledge in real-world scenarios. It’s a great option for those who prefer a more practical learning experience.
3. Online courses:
Studying bookkeeping online is a great option for people wanting to learn the skill on the side. It’s suitable for busy people, and some courses even let you learn at your own pace. Online courses are also suitable for those wanting to learn at home, rather than having to go on campus.
Bookipi has plenty of free resources and bookkeeping tips that you can read up on.
The best path for you will depend on your individual learning style, budget, and career goals.
Relevant certification programs for future bookkeepers
While not required for every job, a bookkeeping certification can help you get your foot in the door. There are different certifications depending on where you live. In the US, you can get a Certified Bookkeeper (CB) credential from The American Institute of Professional Bookkeepers (AIPB). This is a well-known certification and many companies favor it.
The AIPB also offers an “Advanced Certified Bookkeeper” (ACB) certification. This is great for anyone wanting to master more complex bookkeeping tasks.
New certifications pop up all the time. Do some research online to see if there are any in your area that might interest you. Some might focus on specific areas of bookkeeping like payroll.
Setting up your own bookkeeping business
The world of bookkeeping offers a few ways to learn the ropes. Many bookkeepers choose to freelance or open their own bookkeeping businesses. This means you get to be in charge!
Freelancing
Freelancing is perfect for anyone who wants to be in charge of their own work day. You can choose the clients you want to work with, set your own hours, and decide how much to charge for your services. See this guide on pricing your services. Freelancing is a “solo” gig, so you won’t have any colleagues. Depending on your preferences, this may or may not be the right setup for you.
Owning your own business
This is like taking freelancing to the next stage. You can level up your business and open your own bookkeeping company. Doing this allows you to hire other bookkeepers to work with you so you can spread the workload. You’d be the boss, managing the business and making sure everything runs smoothly. Love the sound of starting your own business but don’t know where to begin? Start by writing a business plan and take it from there.
No matter which path you choose, being your own boss comes with extra responsibility. Business owners and freelancers need to factor in the management of their business. This might add more hours to the work day.
Luckily there’s helpful bookkeeping softwares like Bookipi that can help you save time. It can be a great tool to help you manage your bookkeeping tasks. This is true whether you’re working for someone else or running your own show.
The best path for becoming a bookkeeper will depend on your goals and personality. Do you like working independently or being part of a team? Do you want to focus on bookkeeping tasks or also manage a business? Researching the different options and talking to experienced bookkeepers can help you decide how you want to go about becoming a bookkeeper.
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