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A bookkeeper is responsible for maintaining a company’s financial records. They are accountable for recording financial transactions, such as sales, purchases, and payments, and ensuring that the documents are accurate and up-to-date. Some of the duties of a bookkeeper include:

  • Recording financial transactions in the company’s accounting system
  • Reconciling bank statements
  • Maintaining accurate records of accounts payable and accounts receivable
  • Preparing financial statements, such as balance sheets and income statements
  • Assisting with budgeting and forecasting
  • Helping with audits and tax preparation

Bookkeepers typically work with financial software to manage their records and may also use spreadsheets to create financial reports. They are also responsible for ensuring that their records comply with financial regulations and laws.

It’s important to note that Bookkeepers are responsible for recording and maintaining the financial records, while an accountant is responsible for interpreting and providing advice based on those records.

What is a Bookkeeper?

Bookkeeper definition: A bookkeeper is someone who keeps track of every transaction in a business, be it credit or debit balances. From things as small as parking fees to the major ones such as property purchases, a bookkeeper will have those all written down neatly in a book. They work daily to avoid missing out on something.

Some use the term “bean counters” to refer to bookkeepers or accountants. However, it is highly advisable never to use the word because it has a derogatory connotation. Bean counters refer to people who are too fussy and petty about small things such as beans. This explanation answers the questions of what is bookkeeping and what does a bookkeeper do. Meanwhile, it is a bookkeeper’s responsibility to pay attention to the details of every transaction. 

History of the Bookkeeper

The profession is nothing new. The first bookkeeper ever recognized in history dates back as far as 2600 BC. Paleontologists found that people at that time used clay slabs and stylus to note down their transactions. 

An Italian mathematician, Luca Pacioli, also found that the advanced bookkeeping technique has been around since the late 15th century. Back then, people already used the double-entry system, the financial bookkeeping technique that most people use today. They only used hand-written journals and ledgers. It is such impressive progress considering that computers have not existed yet. 

Bookkeeper vs Accountant

Bookkeepers and accountants are professionals who work with financial records, but they have different responsibilities and roles.

A bookkeeper is responsible for maintaining a company’s financial records. They record financial transactions, such as sales, purchases, and payments, and ensure that the documents are accurate and up-to-date. Bookkeepers typically work with financial software to manage their records and may also use spreadsheets to create financial reports.

An accountant, on the other hand, is responsible for interpreting and providing advice based on the financial records that the bookkeeper maintains. They use financial information to create financial statements and reports and advise the company on financial matters. Accountants also help with budgeting and forecasting and ensure that the company’s financial records comply with regulations and laws. They also help with tax preparation and may work with external auditors to ensure compliance with accounting standards.

In summary, bookkeepers handle the day-to-day financial transactions and record keeping, while accountants interpret and analyze the financial records to provide strategic and financial advice to the company.

Bookkeeping certifications

Bookkeepers should have a Bachelor’s Degree in accounting, finance, or any other related field to easily understand concepts in finance and accounting. Some colleges offer special bookkeeping programs and training courses. 

Although bookkeeping does not require any formal education or degree, there are several certifications available for bookkeepers. The following are the most popular bookkeeping certifications.

Certified Bookkeeper (CB)

Certified Bookkeeper is offered by the American Institute of Professional Bookkeepers (AIPB). To earn this certification, candidates must pass a four-part exam that covers bookkeeping and accounting principles, payroll, taxes, and other bookkeeping-related topics.

Certified Public Bookkeeper (CPB)

Certified Public Bookkeeper is offered by the National Association of Certified Public Bookkeepers (NACPB). To earn this certification, candidates must pass an exam that covers bookkeeping and accounting principles, payroll, taxes, and other bookkeeping-related topics.

QuickBooks ProAdvisor

QuickBooks ProAdvisor is offered by Intuit, the maker of QuickBooks. To earn this certification, candidates must pass an exam that covers the features and functionality of QuickBooks, as well as best practices for bookkeeping and accounting using the software.

Certified Professional Bookkeeper (CPB)

Certified Professional Bookkeeper is offered by the National Association of Certified Professional Bookkeepers (NACPB). To earn this certification, candidates must pass an exam that covers bookkeeping and accounting principles, payroll, taxes, and other bookkeeping-related topics.

Xero Advisor

Xero Advisor is offered by Xero, the maker of Xero accounting software. To earn this certification, candidates must pass an exam that covers the features and functionality of Xero, as well as best practices for bookkeeping and accounting using the software.

Bookkeeper duties

Bookkeepers are responsible for maintaining a company’s financial records and ensuring that the records are accurate and up-to-date. Some of the specific duties of a bookkeeper are the following.

  • Recording financial transactions: This includes recording sales, purchases, and payments, as well as any other financial transactions that the company makes.
  • Reconciling bank statements: This involves comparing the transactions recorded in the company’s accounting system to the transactions that appear on the company’s bank statements to ensure that they match.
  • Maintaining accounts payable and accounts receivable: This includes recording any bills that the company owes to suppliers and any money that customers owe to the company.
  • Preparing financial statements: This includes creating balance sheets and income statements, which provide a snapshot of the company’s financial position at a given point in time.
  • Assisting with budgeting and forecasting: This involves working with the company’s management team to create budgets and financial projections.
  • Helping with audits and tax preparation: This includes working with external auditors to ensure that the company’s financial records comply with financial regulations and laws and with tax preparers to ensure that the company’s taxes are prepared correctly.
  • Communicating with vendors, customers, and other stakeholders to resolve issues and answer questions related to financial transactions.
  • Keeping informed of new accounting regulations and laws.
  • Management of payroll, handling employee benefits, and other human resources-related tasks.

It’s important to note that the specific responsibilities of a bookkeeper may vary depending on the size and type of the company they are working for. Some bookkeepers may also have other responsibilities as well.

Outputs

Bookkeepers deliver accounting ledgers, which contain financial reports and documentation. Meanwhile, accountants submit finance forecasts and propose strategies based on the data they analyze. 

Financial Decisions

Management requires input from accountants for any crucial decision that affects the company’s finance. It is such a critical aspect to consider because it will affect future profit and loss. On the other hand, bookkeepers are not involved in the company’s decision-making process. 

Correlations

A bookkeeper will submit the report to the accountant and the management. The accountant will then analyze the data and arrange budgeting plans that they think will benefit the business. Managers will look into it and make decisions accordingly.

Job Descriptions of A Bookkeeper

If you’re wondering what a bookkeeper does, it’s relatively straightforward. Most of the time, a bookkeeper will be busy with data entry and receipt wrangling. Their main job is to document and summarize every earning and spending as neatly and meticulously as possible. To be more specific, these are the things that a bookkeeper should do:

  1. Recording every transaction, both credits and debits.
  2. Documenting receipts for every transaction
  3. Updating the ledgers regularly in chronological order
  4. Processing daily banking activities
  5. Issuing payrolls for staff
  6. Reconciling accounts to ensure the accuracy of the booking
  7. Delivering financial reports regularly, usually every end of the month
  8. Notifying management of every finance issue and variance
  9. Paying taxes and taking care of tax returns if needed
  10. Monitoring cash flows and annual company budget

Qualification Requirements

bookkeeping degree

Photo by MD Duran on Unsplash

Due to its more simple duties, a bookkeeper requires fewer qualifications than an accountant. However, it doesn’t mean that anybody can perform bookkeeping work. If you seek a bookkeeper for your business, make sure to look for these traits:

  1. Close attention to details because even the smallest transaction matters
  2. Well-organized because they need to maintain a meticulous ledger
  3. Scrupulous and thorough because accuracy is crucial
  4. Basic data entry skills
  5. Basic accounting knowledge
  6. Proficient in Microsoft Excel

Benefits of Having A Bookkeeper

Statistics show that most companies managed to increase their profit, mainly after hiring a bookkeeper or using outsourced bookkeeping. Furthermore, running a business is also less stressful than it used to be due to a bookkeeper’s presence in the company. There are many logical explanations behind it, such as:

  1. Save energy and time for counting transactions by hiring a bookkeeper or using one of the bookkeeping solutions, so you can focus on more important matters.
  2. Allow you to make wiser decisions because it is clear to see where and how much your money is coming from and going.
  3. Financial audits will be stress-free and mess-free because all the transactions are noted in the ledger.
  4. Easier to identify which budget to increase and decrease to make the business more efficient
  5. Rest assured that the taxes and employee salaries will get handled accordingly and on time.
  6. Having bookkeepers will decrease your accountants’ responsibility. Hence, you may save money by hiring fewer accountants because bookkeepers get paid lower than accountants in general. 

Remote Bookkeeper

The invention of computers has made the bookkeeper’s job significantly more comfortable. You even have the option to choose a virtual bookkeeping service like NumberSquad. Of course, there are many advantages if you invest in this modern bookkeeping service, such as:

  1. Lower cost, especially if you don’t need a full-time bookkeeper.
  2. Fewer risks of accidental inaccuracy with peer review and quality control
  3. Get one-on-one support anytime you need

The more your business grows, the more transactions your company has each day. Alongside that, you will also have more important things to do. It is impossible to handle everything on your own. But on the other hand, missing out on a transaction can harm your company’s financial balance. It is such a huge risk. Be it a full-time, part-time, or virtual one. A bookkeeper will make sure your financial transactions are in check. 

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