Accounting - How To Become A Bookkeeper
How To Become A Bookkeeper: Degree & Career Guide
Getting into the field of finances may seem a bit intimidating for many, even if it is something you have wanted to do all your life. Now that you are at the point of making this big life decision, you may be wondering where you should start, and if there even are entry-level roles in a field as complex as finances.
Well, you are in luck, because there are such roles, one such being that of a bookkeeper. Being a bookkeeper is a great way of entering the workforce, either while you are still currently studying and furthering your academic career, if you are planning to get back into academics and pursue a higher qualification at a later stage, or if you are just hoping to get into the workforce as soon as possible.
To become a bookkeeper, you don't need an advanced degree. All you need is your high school diploma, an associate degree or certificate, and some hands-on training before you take a step into your career.
Let us delve into the career of a bookkeeper and look at everything you need to know about being and becoming one.
What Is A Bookkeeper?
A bookkeeper plays an integral role in running and operating a business, not because they are in management roles, but because they directly work with and control the finances that come into and go out of a business.
If finances are the blood that goes in and out of a business, then bookkeepers are the heart that moves the money exactly where it needs to go. Considering the important role of bookkeepers, they may even determine a business's financial success or failure.
It is for that reason that even above skill and expertise, those who fulfill the role of a bookkeeper are required to have innate honesty, truthfulness, and integrity.
While accountants manage the financial data of a business and present this data to stakeholders, bookkeepers are involved in the day-to-day financial transactions that occur within a company.
If you have not yet met the requirements to pursue a role as an accountant, then a bookkeeper is the next best option which allows you to work directly in finances, without needing to have a higher degree.
Considering the role that those in finance play, they would need to be ever-present and hands-on to make sure everything is done properly and accurately. However, given the direction the world is moving, bookkeeping is one of the few financial roles that can be done remotely and that can be done as a freelancer role.
What Do Bookkeepers Do?
In handling all of the daily financial transactions, bookkeepers are responsible for managing all money coming in and moving out of a specific account. In some larger organizations, a bookkeeper may be responsible for overseeing more than one account.
Bookkeepers don't just record financial transactions, but it is also up to them to make sure that the company remains financially stable. This means that they are responsible for deciding of certain transactions are deemed a necessity or if they may be detrimental to the financial health of the company.
They need to monitor the finances of a company to ensure that the organization remains profitable, and they need to advise management and accountants when the financial status of a company looks concerning.
They may also manage some aspects of budgeting within the company, and with the financial expertise that they may have acquired through experience or certification, they can ensure that a company doesn't move into a financial deficit status.
As a bookkeeper, you will also learn and become knowledgeable about federal and state laws and how these may impact financial transactions. Through this, bookkeepers can either give the go-ahead or stop certain transactions from being made, especially if they are not compliant with these laws.
Additionally, the duties of a bookkeeper will entail drafting financial reports that are handed to accountants, auditors, and financial directors; consistently updating financial records to ensure they reflect true and accurate information; and adjusting budgets that may have already been drafted.
They also monitor all accounts payable and receivable, they are responsible for checking and reporting any discrepancies that they may find, and they are responsible for managing the internal payroll processes of the company.
Even beyond conducting payroll, issuing wages and salaries, and calculating the hours worked by each employee, bookkeepers may also be responsible for calculating employee leave pay and deducting vacation days or sick days where necessary.
You may have noticed that the requirements of a bookkeeper are quite extensive and that as a bookkeeper, you will be playing an important role in the organization that you work in or with the clients that you may have. It is not a "one and done" kind of job and requires finances and reports to be constantly monitored and updated for accuracy and efficiency.
Steps To Become A Bookkeeper
Step One: Obtain Your High School Diploma
Every career begins with you completing high school. It is also at this stage of your life that you will realize what your strengths and weaknesses are. You may find yourself being numerically inclined in high school and this may prompt you into pursuing a career in finances.
Step Two: Pursue A Qualification
Although this is not a requirement, having some background understanding of finances, accounting, and bookkeeping may be beneficial when you are looking for a job as a bookkeeper. While you can find a job as a bookkeeper straight out of high school, some organizations may require you to either have a diploma, an associate degree, or even a bachelor's degree in accounting or a related field before accepting your application as a bookkeeper.
Obtaining a qualification is also beneficial to your growth within the field as you may find yourself moving up the corporate ladder with these qualifications in hand.
Step Three: Obtain Direct Training And Experience
There are many ways that you can gain direct experience as a bookkeeper. The first would be to work in an organization in the role of a bookkeeper in an entry-level position. This may be the best option if you are pursuing this role directly out of high school as you will learn valuable skills.
Alternatively, you can work as a freelancer or establish your bookkeeping firm, but this would be best done once you have some form of experience.
Step Four: Obtain Certification
Once you have some experience in your back pocket, you can become officially certified as a bookkeeper by obtaining your certification from the American Institute of Professional Bookkeepers or the National Association of Certified Public Bookkeepers.
How Much Does A Bookkeeper Earn?
According to the U.S. Bureau of Labor Statistics, bookkeepers, accounting clerks, and auditing clerks earn a median annual salary of $45,560. However, this field expects to see a projected 5% decline in employment. Despite this decline in available employment opportunities over the next decade, there will be around 197,600 new jobs opening in the field year on year to replace those who have left the workforce.
What Does It Take To Be A Good Bookkeeper?
You would need to have the ability to analyze and assess financial data, and you would need to have analytical skills and organizational skills. You would also need to have computer skills and you would need to be able to work with a wide array of computer technology and accounting software as most bookkeeping processes are done on the computer.
You would also need to have important soft skills such as being able to communicate with others effectively, being dependable and prompt, and having honesty and integrity.
What Tools Does A Bookkeeper Use?
Aside from a good old fashion and study calculator, bookkeepers work with accounting and booking software, they work with computers, and they may even work with ledgers in a written format, depending on the processes of the company within which they work.
What Is The Difference Between A bookkeeper And An Accountant?
Bookkeepers manage and control the day-to-day financial transactions of an organization. They are responsible for assessing what money comes into a business and what money goes out of a business. They are also responsible for issuing receipts and paying the bills within a company.
Accountants don't usually handle the day-to-day transactions but rather deal with larger financial issues, presenting reports, and all tax matters pertaining to a business.
If you are hoping to get into the field of finances but you are concerned about not having any background qualifications, pursuing the role of a bookkeeper may be the best role for you!