What Is Bookkeeping? Duties, Pay, and How to Become One
KARTHIK PANDIYAN
Information Technology Manager @ Amazon Web Services (AWS) | Project Management Specialist
Bookkeeping is a critical part of any business or organization that helps to keep track of financial transactions. It involves recording financial transactions, organizing and analyzing data, and producing financial reports for management. In this article, we will explore what bookkeeping is, the duties of a bookkeeper, how much they get paid, and the steps to become one.
Learn more about what bookkeepers do and how to get started in this career.
Bookkeepers manage a company’s financial accounts, ensuring they are accurate and easy to review. Their work plays an important role in the operation of a successful business, which can have very many transactions in a single day, let alone a week, month, fiscal quarter, or year.
If you’re a detail-oriented individual who enjoys working with numbers, then you might consider a career as a bookkeeper .
you’ll learn more about what bookkeepers do, why they’re important to a business, and how much they earn. You’ll also explore how to become one and find suggested cost-effective courses that can help you gain job-relevant skills today .
What is Bookkeeping?
Bookkeeping is the process of recording, classifying, and organizing financial transactions. It is the first step in the accounting process and involves the collection and organization of financial data that will be used to produce financial reports. Bookkeeping ensures that all financial transactions are accurately recorded and organized to facilitate decision-making.
Bookkeeping is the process of keeping track of a business’s financial transactions. These services include recording what money comes into and flows out of a business, such as payments from customers and payments made to vendors. While bookkeepers used to keep track of this information in physical books, much of the process is now done on digital software .
It’s a skill used in both large companies and small businesses, and bookkeepers are needed in just about every business and industry.
Did you?know?
Bookkeeping as a profession dates back to the 15th century when Italian mathematician Frater Luca Pacioli — the father of modern bookkeeping — detailed many accounting systems and tools still used today, including double-entry bookkeeping.
Types of bookkeeping
There are several types of bookkeeping that bookkeepers perform. Two of the most common are single-entry bookkeeping and double-entry bookkeeping.
Single-entry bookkeeping records all transactions in just one row. Typically, single entry bookkeeping is suitable for keeping track of cash, taxable income, and tax deductible expenses.
Double-entry bookkeeping records all transactions twice, usually a debit and a credit entry. Typically, double-entry bookkeeping uses accrual accounting for liabilities, equities, assets, expenses and revenue.
While single-entry bookkeeping is simpler, double-entry is more thorough and less likely to produce errors.
Bookkeeper vs. accountant: What’s the difference?
Both accountants and bookkeepers work to maintain accurate records of finances, and sometimes the terms are used interchangeably. Generally, bookkeepers focus on administrative tasks, such as completing payroll and recording incoming and outgoing finances. Accountants help businesses understand the bigger picture of their financial situation.
An accountant can certainly perform bookkeeping tasks, but the title generally involves other responsibilities as well. An accountant may interpret the financial records put together by a bookkeeper to assess a company’s financial health. They may also perform audits and prepare tax returns. Becoming an accountant usually requires more training and education than bookkeeping but can be a good next step in your financial career.
What does a bookkeeper do?
The work of a bookkeeper may vary depending on the needs of the business. You may work at a large company, small business, or as a freelancer . Here are some other tasks you may handle as part of this job:
Bookkeeper salary
Bookkeepers make an about average salary. According to the US Bureau of Labor Statistics (BLS ), the median salary for bookkeepers in the US is $45,560 per year as of 2021 . You can sometimes choose between full-time and part-time positions, and you may go to work in an office or work from home.
How to become a bookkeeper
If you’re organized and enjoy working with numbers, a job as a bookkeeper could be a good fit. Here’s what you can do to gain the skills necessary to get started.
1. Take a bookkeeping course.
A bookkeeping course can teach you the basic knowledge you’ll need to prepare financial reports, organize data using tools like Microsoft Excel, or understand how to balance books .
Some courses can also earn you a credential from an industry leader for your resume — like the Intuit Bookkeeping Professional Certificate on Coursera .
While it’s not always necessary to have a degree, some companies will look for candidates with coursework in accounting .
2. Get a bookkeeping certification.
Certifications aren’t necessary to become a bookkeeper but can signal to employers that you have the training and knowledge to meet industry standards. After you have a couple of years of experience, you can earn the Certified Bookkeeper designation from the American Institute of Professional Bookkeepers by passing a series of exams.
3. Build essential bookkeeping skills.
As you take courses and pursue a certification in bookkeeping , be sure to acquire skills that are essential for your bookkeeping career, as explored below:
Technical skills:
Workplace skills:
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4. Consider earning a?degree.
Though having a two-year or four-year degree isn’t always required to be hired as a bookkeeper, some companies may prefer candidates who do.
An associate or bachelor’s degree in bookkeeping or related fields like finance, accounting, or business can teach you about the broader industry, enhance your potential earnings, and boost your competitiveness for jobs. A degree can also help you make the leap from being a bookkeeper to being an accountant or other business-oriented role.
Get started in bookkeeping
Bookkeepers are integral to ensuring that businesses keep their finances organized. If you’re considering a career as a bookkeeper, then you might consider taking a cost-effective, flexible course through Coursera .
In Intuit’s Bookkeeping Professional Certificate , you’ll learn bookkeeping and accounting fundamentals, including asset types, liability, equity, and financial statement analysis, and gain hands-on practice with real-world scenarios. At the end of the course, you’ll receive a professional certificate , which you can put on your resume to demonstrate your skills and accomplishments to potential employers.
Start building the professional skills you need to get a job as a bookkeeper in under four months with the Intuit Bookkeeping Professional Certificate on Coursera . Learn at your own pace from industry experts while getting hands-on experience working through real-world accounting scenarios.
Duties of a Bookkeeper
The duties of a bookkeeper vary depending on the industry, size of the organization, and complexity of the financial transactions. However, some common duties include:
Recording Financial Transactions
Bookkeepers are responsible for recording all financial transactions, including sales, purchases, receipts, and payments, in a company’s general ledger. They must ensure that all transactions are recorded accurately and on time.
Managing Accounts Receivable and?Payable
Bookkeepers manage accounts receivable and payable, which involves tracking all incoming and outgoing payments. They must ensure that all bills are paid on time and that the company receives payments promptly.
Reconciling Bank Statements
Bookkeepers must reconcile bank statements with the company’s financial records to ensure that all transactions are accurately recorded.
Producing Financial Reports
Bookkeepers are responsible for producing financial reports, including balance sheets, income statements, and cash flow statements. These reports are used by management to make informed business decisions.
How Much Does a Bookkeeper Get?Paid?
The pay for bookkeepers varies depending on the industry, location, and experience. According to the Bureau of Labor Statistics, the median annual salary for bookkeeping, accounting, and auditing clerks was $42,410 in May 2022. The highest 10 percent earned more than $62,410, while the lowest 10 percent earned less than $26,160.
How to Become a Bookkeeper
To become a bookkeeper, you typically need a high school diploma or equivalent . However, some employers may require additional education, such as an associate degree in accounting or bookkeeping .
Step 1: Gain Relevant Skills and Knowledge
To become a bookkeeper, you need to have a good understanding of accounting principles, as well as the ability to use accounting software. You can gain these skills through on-the-job training or by taking courses in bookkeeping or accounting.
Step 2: Obtain Certification
While certification is not required to become a bookkeeper, it can demonstrate your knowledge and competence to employers. The American Institute of Professional Bookkeepers (AIPB) offers the Certified Bookkeeper (CB) credential, which requires passing an exam and meeting certain educational and experience requirements.
Step 3: Gain Work Experience
Most employers prefer to hire bookkeepers with some work experience. You can gain experience by working as an accounting clerk, data entry clerk, or bookkeeping assistant.
bookkeeping is a crucial part of any business or organization. It involves recording financial transactions, managing accounts receivable and payable, reconciling bank statements, and producing financial reports. The pay for bookkeepers varies depending on the industry, location, and experience, but the median annual salary is $42,410.?
To become a bookkeeper, you typically need a high school diploma or equivalent, relevant skills and knowledge, certification , and work experience. With these requirements, you can become a successful bookkeeper and contribute to the financial success of any organization .
Are you looking for a career that involves managing finances and helping businesses stay organized? Look no further than bookkeeping! Bookkeeping involves keeping track of financial transactions, creating financial statements, and maintaining accurate records.
As a bookkeeper, your duties may include recording income and expenses, reconciling bank statements, and preparing tax documents. With an average salary of $42,000 per year, bookkeeping can be a rewarding career choice.
To become a bookkeeper, you may need a degree in accounting or a related field. However, there are also certification programs available that can provide the necessary skills and knowledge .
At Xendoo , we provide Bookkeeping Services . Our product can help make bookkeeping easier and more efficient for businesses of all sizes. Don’t let the hassle of bookkeeping weigh you down, let us help!
?? Comment below if you have any bookkeeping tips or tricks that have helped you stay organized!