Bookkeeping is the first step in the accounting process. It is an essential function in order to maintain all the financial data and provide insight into the business performance. Bookkeepers help to record, manage and provide comprehensive financial reports and ultimately saves a lot of time. Let’s explore how to become a bookkeeper, the responsibilities, skills and qualifications required and what job you can pursue.
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Who is a Bookkeeper?
A bookkeeper is responsible for recording and managing financial records and transactions for a business. Through their expertise and knowledge, they ensure that the accounts and records are accurate and complete. Bookkeepers are responsible for simply managing information. They record transactions as journal entries as and when they occur, then categorise that information into ledgers and trial balance, which is further used to prepare the balance sheet and the income statement. They keep track of the full accounting cycle from start to finish except for the interpretation of data which is the role of an accountant.
Responsibilities of a Bookkeeper
- Data Entry: Bookkeepers categorize all transactions and make entries as and when the transactions occur.
- Preparation of Key Financial Statements: The bookkeeper undertakes the preparation of journal entries, ledgers, trial balance and from these the bookkeeper prepares key financial states like profit/loss statement, income statement, cash flow statement and balance sheet which are necessary to understand the performance of any business.
- Compiling Bank Statements: Bookkeepers are required to compile the bank statements in order to ensure that all transactions are correct and accounted for.
- Handling Invoices and Receipts: In addition to tracking and recording transactions, the bookkeepers also keeps a record of the invoices, receipts and follow up on late payments. They ensure that all cash coming into the business is managed.
- Maintaining Payroll Records: In an organization with multiple employees, bookkeepers help with managing the salary and commission payment, calculating superannuation and payroll tax and keeping records of bank details of the employees.
- Expense Monitoring: Bookkeepers keep a record of all expenses and purchases orders as well as cash and credit transactions.
Skills Required to Become a Bookkeeper
- Mathematical accuracy and problem-solving skills- Bookkeepers use mathematical skills every day to record transactions, prepare ledgers and balance the balance sheet. Problem-solving and mathematical skills are necessary to produce financial reports
- Organization and multitasking skills- The key responsibility of a bookkeeper is to simplify and organize the financial transactions so that it makes sense. Strong organizational and multitasking skills are required
- Knowledge of accounting principles and procedure- Accounting principles guide the entire process of bookkeeping. So relevant accounting knowledge is a must
- Strong computer skills like Microsoft Word and Excel- Bookkeeping nowadays is mostly computerized so it is important to know how to use and operate common bookkeeping software programs
- Attention to Detail- Attentional to detail is required to make sure the financial reports are free of errors even in case of no mathematical inaccuracy
- Communication skills- Ability to communicate and help clients understand the financial reports and their business’s performance
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How to Become a Bookkeeper?
Bookkeeping can be pursued even without a degree, most bookkeeping qualifications are at diploma or certificate level. Having a commerce background in school as well as college is definitely helpful. A degree improves the job prospects and salary packages. You can choose any of the following routes to become a bookkeeper:
Pursue Bookkeeping Courses
Bookkeepers can pursue job opportunities without a degree. Still, you can choose to complete a bookkeeping or accounting course which adds value to your resume. These courses teach basic accounting and bookkeeping processes as well as train you to use common bookkeeping software. You can also pursue these courses online.
Pursue an Associate Degree
You can pursue an associate degree in accounting or bookkeeping. It is generally a 2-year program and will provide you training in the core tasks required of bookkeepers, including recording financial transactions, managing the general ledger, and preparing invoices. Bookkeepers with an associate degree have better job prospects.
Pursue a Bachelor’s Degree
Earning a bachelor’s degree in accounting makes bookkeepers eligible for advanced positions. With a bachelor’s degree, you can also pursue advanced career options as an accountant or auditor.
Get Certified as a Bookkeeper
Bookkeepers may benefit from getting nationally certified by professional organisations. The AIPB and the NACPB are top professional bookkeeping organisations that can give the title of Certified Bookkeeper
Top Universities that Offer Bookkeeping Courses Abroad
As per QS World Rankings 2022, here are the top 10 universities offering accounting and finance courses.
- Harvard University, United States
- Massachusetts Institute of Technology (MIT), United States
- Stanford University, United States
- The London School of Economics, United Kingdom
- University of Oxford, United Kingdom
- University of Pennsylvania, United States
- University of Cambridge, United States
- University of California, Berkeley (UCB), United States
- University of Chicago, United States
- New York University (NYU), United States
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After gaining bookkeeping training through courses, certifications, and/or degrees, bookkeepers can pursue entry-level opportunities. Bookkeepers can work full-time jobs, part-time jobs or as freelancers.
They can work as bookkeeping clerks, auditing clerks, data entry clerks, payroll managers, interns, etc. Bookkeepers with a bachelor’s degree or certification can apply for more competitive positions than bookkeepers without these credentials.
The average annual salary of a bookkeeper is Rs. 2.5-3.5 lakh in India and in the USA the average hourly pay for a Bookkeeper is $18.16 (INR 1365).
Bookkeepers simply manage and record financial transactions to prepare financial statements whereas accountants are responsible for interpreting those financial statements to devise a financial strategy for the business and things like tax filing.
Yes, you can start your bookkeeping career without an official degree but it would be helpful to earn a certificate or an associate degree.
Bookkeepers record and manage financial records and transactions for a business. They record transactions as journal entries as and when they occur, then categorise that information into ledgers and trial balance, which is further used to prepare the balance sheet and the income statement.
Are you planning to pursue an accounting and finance course abroad and become a bookkeeper? Our Leverage Edu experts will provide end-to-end guidance from the application to visa process. Call us at 1800 57 2000 to book your FREE 30- minutes counselling session today.