Bookkeepers record, track and update an organization’s financial information, including sales, purchases and payroll. They do more than post and categorize financial transactions. Bookkeepers also follow up on invoices, reconcile bank statements and calculate depreciation, according to the American Institute of Professional Bookkeepers (AIPB). By keeping accurate, up-to-date records, bookkeepers help their organizations comply with tax regulations, better understand cash flow and identify areas for potential growth.
What are the Duties of a Bookkeeper?
Bookkeepers manage financial records for organizations of all sizes, representing all industries. The records they keep include expenditures (money spent) and receipts (money received). They also track accounts payable (outstanding bills), accounts receivable (invoices or payments from customers) and profit and loss, according to the U.S. Bureau of Labor Statistics (BLS).
Other transactions include:
- Inventory: Unsold products have value and must be accounted for and recorded.
- Loans: The money organizations borrow to pay for office space, equipment, trucks or other big purchases. Bookkeepers must make timely payments and keep track of those payments.
- Payroll expenses: The cost of labor, one of the most significant expenses for many businesses. Bookkeepers are required to keep these accounts current and accurate to fulfill government reporting and tax requirements.
- Purchases: Also known as the “cost of goods sold,” or what your organization pays for raw materials or other goods that you need to run the business.
- Sales: The money your organization makes by providing goods and services.
You can expect your duties as a bookkeeper to vary slightly, depending on the size and type of organization you work for. For example, if your employer is a small or medium-sized business, you might manage more of its accounting tasks, including financial statements, tax returns and payroll. According to Indeed, you would typically see accountants or controllers performing some of those duties in larger organizations.
What Skills Do You Need to Be A Bookkeeper?
To get an accurate picture of the financial health of an organization, business leaders need skilled bookkeepers who possess a combination of ‘hard’ financial skills and ‘soft’ interpersonal skills,” said Mona Stephens, a certified public accountant (CPA), certified internal auditor and faculty lead for accounting at Southern New Hampshire University.
These include:
- Analytical skills: Identifying discrepancies or trends or assisting with budgeting or forecasting.
- Attention to detail: Accurately record data and maintain error-free records.
- Communication skills: The ability to clearly explain financial scenarios or reports.
- Ethics/confidentiality: The ability to adhere to confidentiality and maintain ethics when managing sensitive financial data.
- Financial literacy: An understanding of basic accounting principles, terminology and financial statements. Bookkeepers should also know how to do double-entry accounting, a method of bookkeeping that requires two book entries — a debit and a credit — for each business transaction.
- Organizational skills: Juggling and maintaining financial records, invoices, receipts and other documents.
- Proficiency in accounting software: Using financial tools to record transactions, reconcile accounts and create reports.
- Time management: The ability to prioritize workload and meet deadlines.
Clean, accurate accounts not only give business leaders a current financial snapshot of the business, but also help them measure its financial health. As routine tasks become more automated, thanks to advances in bookkeeping and accounting software, bookkeepers can expect to conduct more financial analyses and play advisory roles in the future, Stephens said. For example, rather than manually entering data, you may spend more time analyzing clients' books and pinpointing efficiencies.
"The growth of accounting software has allowed today's bookkeepers to provide greater value through visualizations that can help tell the story of a business's financial activity," Stephens said.
What Education Do You Need to Become a Bookkeeper?
To become a bookkeeper, you need a high school diploma. You can usually get on-the-job training from an experienced supervisor or another employee, according to BLS.
You can also learn the skills you need to be a proficient bookkeeper through self-study, internships or experience, Stephens said. Taking courses in bookkeeping, payroll and online accounting systems can prepare you for a bookkeeping role.
“Having an associate or bachelor’s degree might give candidates an edge, depending on the organization,” she said.
Some bookkeepers advance with the help of nationally recognized certifications. After working for at least two years, you can choose to become certified through one of several bookkeeping organizations, such as the National Association of Certified Public Bookkeepers (NACPB) or the American Institute of Professional Bookkeepers.
These credentials validate that you have the skills and knowledge to perform bookkeeping tasks in alignment with accepted accounting procedures. For example, the NACPB requires professionals who want to become Certified Public Bookkeepers to complete coursework in accounting, payroll and QuickBooks online accounting software.
Does a Bookkeeper Have Payroll Duties?
Payroll management can fall under the umbrella of human resources, get outsourced to a third party or be managed by a company’s finance department. Small businesses may keep payroll duties in-house and assign them to a bookkeeper for budget reasons. In this scenario, you could expect to calculate employee salaries, deduct taxes and withholdings and ensure employees get paid on time.
Because bookkeepers must be prepared to manage payroll tasks, the National Association of Certified Public Bookkeepers' licensure program requires candidates to complete a payroll certification module as part of its program. In its Payroll Fundamentals Training Course, you'll learn payroll system procedures, gross pay computations and how to calculate payroll taxes and account for deductions and fringe benefits.
How Much Do Bookkeepers Make?
Bookkeepers earned a median annual salary of $45,560 in 2021, according to the BLS. The highest 10% earned more than $61,980, and those employed in the finance and insurance sector earned slightly more than the median, BLS reports. Most bookkeeping, accounting and auditing clerks work full-time but may be required to work overtime to meet end-of-month, end-of-year or tax deadlines.
In contrast, accountants earned a median annual salary of $77,250 in 2021, reports BLS, with the highest 10% earning more than $128,970. To become an accountant, you typically need a bachelor's degree in accounting or a related field. In some cases, bookkeepers who meet the education and experience requirements set by employers may get hired for junior accounting positions and advance while working on the job, according to BLS.
What is the Difference Between a Bookkeeper and an Accountant?
While bookkeepers and accountants both interact with a company's financial data, they have different responsibilities and educational backgrounds.
For example, bookkeepers record and manage an organization's chart of accounts, while accountants complete financial tasks that require more complex analysis. In their roles, accountants forecast performance, provide financial advice, conduct audits and prepare tax returns and typically hold bachelor's degrees, according to BLS.
To become a Certified Public Accountant (CPA), you must fulfill additional requirements. CPAs must first earn a bachelor's degree, but also may need to take additional courses and meet experience requirements before they can take the four-part Uniform CPA Examination, according to the American Institute of Certified Public Accountants (AICPA).
Bookkeepers have the critical job of ensuring the accuracy of the business's financial records but usually aren't required to complete audits or provide recommendations to leadership.
"A bookkeeper records the financial transactions of an organization and takes care of day-to-day functions such as recording sales and invoices, paying bills and processing payroll," Stephens said. "Accountants take the financial data and analyze it to help organizations make financial decisions."
If being an accountant interests you, learn more about how an accounting degree helps.
Is Bookkeeping a Good Career?
If you enjoy working with financial data and are adept at using computer software, bookkeeping may align with your career goals. It also offers flexibility. Some bookkeepers work in an office as part of a team, and others remotely, supporting third-party businesses as freelance workers. According to Indeed, bookkeeping is one of the highest-paying jobsyou can do remotely.
Bookkeepers pursuing professional certification can earn more money and take on additional responsibilities. The AIPB reports that 54% of its certified bookkeepers got a new job promotion or higher-level responsibilities after earning their credentials. 59% said they received a raise, and freelance certified bookkeepers said they were able to gain new clients and raise their rates.
The skills you gain on the job and through credentials can also position you to move into bookkeeping supervisory roles or junior accountant roles. If you are working toward your bachelor's degree in accounting, some employers may be willing to offer you an accounting job once you earn your degree.
"Essential to the operational success of any business, bookkeepers continue to play an important role in the workplace," Stephens said. "While small business accounting software has made bookkeeping functions more organized, small business owners are still busy and rely on the expertise of bookkeepers.
Discover more about SNHU’s associate degree in accounting: Find out what courses you'll take, skills you’ll learn and how to request information about the program.
Krysten Godfrey Maddocks '11G is a writer and marketing/communication professional. Connect with her on LinkedIn.
