What is a bookkeeper?

Awarded by the CFA Institute, the CFA certification is one of the most respected designations in accounting. In this program, accountants learn about portfolio management, ethical financial practices, investment analysis and global markets. To complete the program, accountants must have four years of relevant work experience. Accountants verify and analyze data, generate reports, spot trends, and provide business owners with insights from their financials. To earn the certified public bookkeeper license, bookkeepers must have 2,000 hours of work experience, pass an exam, and sign a code of conduct.

In addition, bookkeepers are not required to have an undergraduate degree; accountants typically are expected to have, at least, four years of formal training. The widespread use of computers and bookkeeping programs has dramatically cut down on the amount of time required for bookkeepers to perform their bookkeeping duties. As such, many offices now require bookkeepers to take on additional responsibilities, such as payroll, customer service, or billing. A Bookkeeper refers to a corporation’s or organization’s financial record keeper. This person will usually be in charge of keeping records of the company’s accounts, expenditures, earnings, profits, losses, receipts, etc. Bookkeepers and Accountants fall under the supervision of the Securities and Exchange Commission (SEC).

Full charge bookkeeper definition

You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided. Bookkeepers may also share some jobs with accountants, such as the preparation of annual financial reports and tax returns. Most often, their reports go to business owners and managers to help them make decisions. Some bookkeepers, however, are actually involved in strategy development.

Bookkeepers handle the day-to-day tasks of recording financial transactions, while accountants provide insight and analysis of that data and generate accounting reports. Large firms break down the bookkeeping responsibilities into specialized areas. Each area is handled by one or more bookkeeping clerks, also called accounting clerks, who are supervised by a head bookkeeper. Auditing clerks check records posted by other workers to make certain they are correct. When it’s finally time to audit all of your transactions, bookkeepers can produce accurate reports that give an inside look into how your company delegated its capital.

When to hire a financial professional

Some people, usually those not involved in bookkeeping or accountancy, use the terms accountant and bookkeeper interchangeably. The median annual salary for bookkeeping, accounting, and auditing clerks was $28,570 in 2004, according to the Bureau of Labor Statistics. An aptitude for mathematics and the ability to concentrate on detail are basic requirements. Once on the job, a bookkeeper with some business education beyond high school will have a better chance for advancement.

The responsibilities of a bookkeeper include a fair bit of data entry and receipt wrangling. They’re responsible for recording every financial transaction in your general ledger using double-entry bookkeeping—usually called recording journal entries. That sounds like a mouthful, but often that just looks like inputting all your transactions into accounting software. Most small firms have one general bookkeeper, also called a full-charge bookkeeper. General bookkeepers verify and enter into ledgers the details of their firm’s financial transactions.

Keep your general ledger current

As a partial check that the posting process was done correctly, a working document called an unadjusted trial balance is created. Column One contains the names of those accounts in the ledger which have a non-zero balance. If an account has a debit balance, the balance amount is copied into Column Two (the debit column); if an account has a credit balance, the amount is copied into Column Three (the credit column). The debit column is then totalled, and then the credit column is totalled. The two totals must agree—which is not by chance—because under the double-entry rules, whenever there is a posting, the debits of the posting equal the credits of the posting.

Check out our reviews of the best accounting software for small businesses so you can create invoices, record payments, collect receivables and run reports that help you manage your financial health. Accounting software allows you and your team to track and manage your business’s expense reports, invoices, inventory, and payroll accurately and efficiently. To choose accounting software, start by bookkeeping for startups considering your budget and the extent of your business’s accounting needs. If you opt for bookkeeping software—like Quickbooks—keep in mind the time commitment required to learn how to properly use the program. While these programs are cost effective, you are paying with your time. And at a certain point, your time is better spent building your business than navigating DIY tutorial videos.

key benefits of bookkeeping

Bigger companies tend to offer better compensation for bookkeepers; this is largely due to the increased volume of transactions and data. A multinational corporation performs hundreds of transactions a second, while a small business might perform less than a hundred in a day. The pace of the work is steady and often repetitive, particularly for bookkeeping clerks. Some overtime may be expected during periodic book balancing and at the end of the fiscal year. Some of these workers belong to labor unions that are active in their industry. Bookkeepers with two years of bookkeeping experience can obtain a Certified Bookkeeper designation, which is awarded by the American Institute of Professional Bookkeepers.

To receive this certification, an accountant must pass the required exams and have two years of professional experience. There are no formal educational requirements to become a bookkeeper, but they must be knowledgeable about financial topics and accounting terms and strive for accuracy. A bookkeeper is not an accountant, nor should they be considered an accountant. 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.