All over the world, most businesses by law must do bookkeeping. Bookkeeping records all financial transactions and systematically categorizes them, calculating the business’s exact income and expenses. In other words, bookkeeping is critical to your business’s success, but how much do you know about the profession that keeps you in the financial loop? Read on to find out the career profile of a bookkeeper!
What is a bookkeeper?
A bookkeeper is someone who records your daily business’s transactions and manages accounting ledgers. In essence, a bookkeeper keeps your finances in order.
Responsibilities of a bookkeeper
So, does a bookkeeper only enter data into the accounting system? The answer is definitely no! Besides the main task of collecting and recording data, here are some other common roles a bookkeeper performs:
- Bank reconciliation
A bookkeeper double-checks whether the money leaving an account matches the actual money spent.
With cash flow constantly changing and so much money coming in and out, it’s easy for errors to fall through the cracks. To avoid this, bookkeepers check and compare your recordings to documents provided by a third party (such as a bank, a credit card company, etc.) to ensure data is synced and accurate. In case there are any discrepancies, the bookkeeper will review and promptly correct them.
- Bills and invoices
Bookkeepers can also take care of bills and invoices. This directly involves handling accounts receivable and accounts payable. Both of these responsibilities ensure that customers pay you (ideally on time) and that your bills are paid before the due date.
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- Payroll management
Bookkeepers are sometimes in charge of payroll processing, as well. While the procedure may differ among businesses, the task typically entails verifying and calculating employees’ salaries, deducting taxes and other deductions, and then sending payment.
As every business is different, the responsibilities of a bookkeeper vary across companies and industries. However, in every business, a bookkeeper should carry out excellent and systematic bookkeeping in order to manage finances better and achieve your company goals.
What skills does a bookkeeper need to master?
Here are some ideal qualities and proficiencies to look for when hiring for a bookkeeper:
- Excellent with numbers: All the tasks that a bookkeeper performs involve numbers. That’s why a bookkeeper has to be comfortable dealing with complex calculations. In certain circumstances, the nature of your business determines the level of numerical expertise. But there is no escape from numbers and calculation. So it’s best that your bookkeeper doesn’t get headaches whenever they see digits.
- Extraordinary organizational skills: A successful bookkeeper is someone who’s well-organized. They’re responsible for recording each and every transaction, from supplier invoices to customer receipts. So if bookkeepers don’t know how to organize things, they’re likely to make mistakes and cause you financial damage.
- Good communication skills: A bookkeeper needs to be socially intelligent as they have to communicate with customers, suppliers, and colleagues to collect data. Plus, they should be able to speak in plain English, simplifying technical terms so that everyone can understand.
- Proficient skills in accounting software (optional): If your business doesn’t use an accounting program, this trait is totally optional. Otherwise, computer skills are essential as they can save you time when training, as well as ensure data entry will be accurate to avoid issues..
Do bookkeepers need any qualifications?
In general, a bookkeeper doesn’t need any qualifications or license to perform their job. However, many organizations offer bookkeeping certificates. Though these certifications are not regulated by any state or federal office, it’s still a useful tool for you to seek the most suitable bookkeeper for your business. Below are two examples of common bookkeeping certifications:
- American Institute of Professional Bookkeepers (AIPB): To earn AIPB certification, bookkeepers must have at least two years of full-time work experience, pass a national exam, and agree to follow the AIPB code of ethics. Through its assessment, the AIPB qualifies professionals in many areas like adjustments, error control, payroll, inventory management, internal controls, and fraud prevention. Additionally, bookkeepers need to engage in continuing education to maintain their accreditation.
- National Association of Certified Public Bookkeepers (NACPB): Bookkeepers can obtain different types and levels of NACPB certification and license. To get NACPB licensed, bookkeepers must have 2,000 hours of work experience, pass an exam and sign a code of conduct. They must complete 24 hours of continuing education each year to keep their license.
What is the average salary for a bookkeeper?
The salary or hourly rates you’ll pay totally depend on your business’s nature and what it needs. That means you can determine the right compensation for your bookkeeper through these two factors: services/workload and expertise.
- Services/workload: This is pretty straightforward as the more work you need bookkeepers to do, the more you have to pay them. For example, if you need someone to check the books once a month, it’ll cost less than hiring someone part-time to handle your daily operations. So, determine what tasks you need professional help with, estimate the time it might take them to finish, and then you can know if you need someone part-time, full-time, or on a project basis. From there, you can determine the cost to hire a bookkeeper.
- Expertise: If your accounting system is complex, you would want a certified or licensed bookkeeper. It can give you peace of mind and assurance that your money is in excellent hands, but it will definitely cost you more.
Visit recruiting websites to give yourself a good idea of how much it should cost in your company’s particular market. For instance, according to Indeed, bookkeepers’ average base salary is $38,615 per year and $18,94 per hour (based on 2021 statistics).
Bookkeeper vs. Accountant
By and large, a bookkeeper mainly focuses on recording and organizing financial data. An accountant analyzes, interprets, and communicates those data to business owners and investors.
Check out this article for detailed explanations: Accounting Vs. Bookkeeping: What Are The Differences?
There is no reason for you to stay caught up in day-to-day tasks like recording data or organizing receipts. Hiring a bookkeeper is a wise investment that will help your company flourish. A dedicated bookkeeper can take care of your books and keep good track of your cash flow, freeing you up to devote more time to really grow your business.
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