What Is a Bookkeeper, and Who Needs One? A Simple Explanation

Our partners cannot pay us to guarantee favorable reviews of their products or services. Bookkeeping is a steady career that can lead to more advanced positions. Below we explore just a few of the benefits that come along https://intuit-payroll.org/accounting-for-startups-7-bookkeeping-tips-for/ with working as a bookkeeper. Check out our helpful guide for deciding when is the right time for your business to invest in hiring a bookkeeper. Before we dive deeper into the question at hand—What does a bookkeeper do?

• If you are an external auditor, you will most likely have a job at a public accounting firm, and you will need to have a CPA license, plus a college degree, and often a master’s degree.
• The skills needed to become a successful bookkeeper are often acquired through working in a career in the finance industry or even by balancing your personal budgets.
• You can also pursue on-the-job training, building job skills through an internship or junior bookkeeping role.
• After all, bookkeepers will help you survive an audit by making sure your financial records are in order and your deductions are legal.

If you’re interested in being a freelance virtual bookkeeper, you can sign up for freelance marketplace websites to connect with potential clients. Freelance https://turbo-tax.org/top-5-legal-accounting-software-for-modern-law/ jobs can range from quick temporary projects to long-term employment. However, they may be less likely to offer training or educational opportunities.

What’s the Time Commitment for a Bookkeeping Certification?

Bookkeepers may also assist in running payroll and generating invoices for your company. In an office setting, bookkeepers typically work in a quiet and organized workspace, often alongside other accounting professionals. They may use a computer, calculator, and other specialized software to enter financial data and produce reports. They may also use paper ledgers and other manual accounting tools to record transactions and maintain accurate financial records.

Your bookkeeper might also prepare other auxiliary reports for your business, like accounts payable and accounts receivable aging reports. You can use these to make business decisions, but they should not be presented as audited, certified or Best Practice To Hire or Outsource for Nonprofit Accounting official financial statements. Certifications can help establish your credibility and proficiency, and they can validate your bookkeeping knowledge and skills. Becoming certified can give you a competitive advantage when applying for jobs.

A brief history of bookkeeping

Accountants and auditors are typically required to hold at least a bachelor’s degree (BLS, September 2022). After working in the field for at least a year, CPAs also need to take an exam. To meet the requirements for the CPA exam, some professionals enroll in master’s in accounting programs.

CPAs have similar job responsibilities to bookkeepers, but must also analyze data, suggest best practices, and make predictions. Professionals who are not interested in leadership may also prefer bookkeeping jobs over accounting roles. Bookkeepers focus on day-to-day transactions and operations, whereas accountants are called on to provide financial advice and strategy recommendations.

Components of Bookkeeping

A bookkeeper is skilled at keeping documents and tracks a wide net of financial information. As a business leader, you should have a good idea of which professionals best suit the needs of your company. As such, it’s important to know whether you need a bookkeeper or an accountant to keep track of your affairs.

• Simply put, business entities rely on accurate and reliable bookkeeping for both internal and external users.
• To complete bookkeeping tasks successfully, these professionals should have both hard and soft skills, including the following.
• This is the equivalent of around $45,000 per year, assuming a 40-hour workweek.
• Not only are you entrusting your bookkeeper with sensitive data, you are relying on their accuracy to maintain the financial records for your business.
• Kelly is an SMB Editor specializing in starting and marketing new ventures.

To make the topic of Bookkeeping even easier to understand, we created a collection of premium materials called AccountingCoach PRO. Our PRO users get lifetime access to our bookkeeping training videos, cheat sheet, flashcards, quick tests, tests for prospective employees, guide to bookkeeping concepts, and more. My suggestion is to first read our free 13-part Bookkeeping Explanation and take our Bookkeeping Practice Quiz. Next, you can start studying each of the bookkeeping-related topics found on our Bookkeeping training page.