Bookkeeper Job Description, Skills, Experience and Education
If you enjoy creating organizational frameworks, working with numbers, and helping to problem-solve, then a career in the finance field may be right for you. However, before choosing which career path to follow, you’ll want to look at the differences between the roles of bookkeeper vs. accountant to decide what is a better fit. These are the main differences that set apart a bookkeeper vs accountant. These areas define the roles and functions of bookkeeping vs accounting and show why they’re both essential to the business.
When interviewing for a CPA, look for an accountant who understands tax law and accounting software and has good communication skills. They should understand your industry and the unique needs and requirements of small businesses. A bookkeeper’s job is to organise a business’s bookkeeping, such as recording day-to-day transactions correctly, showing what comes in and goes out of the business. Accounting software can automate the tasks that a bookkeeper traditionally did, but that doesn’t mean their role will become redundant.
Here’s an overview, to help you ensure you’re choosing the right financial professional for your needs. Being consistent, accurate, and minimizing errors are key characteristics that employers are seeking for this position. It is indispensable to have a knowledge of accounting and to understand how to use accounting software systems.
- While accounting can be a lucrative long-term career, most accountants, unlike corporate attorneys or investment bankers, do not command huge salaries during the first few years.
- Choosing an accountant or a bookkeeper with experience will ensure everything is correct and all tax benefits and deductions are applied.
- If you are finding you cannot keep up with your business paperwork and your books are never up to date, you may want a bookkeeper.
- Double-entry bookkeeping demonstrates the fact that all transactions involve some kind of exchange.
- This Bookkeeper job description template is optimized for posting on online job boards or careers pages.
Generally, a bookkeeper is a person without a college degree in accounting who performs much of the data entry tasks. This includes entering the bills from vendors, paying bills, processing payroll data, preparing sales invoices, mailing statements to customers, etc. A bookkeeper’s primary role is to handle your business’s day to day financial data. A bookkeeper should be able to compile reports that give you a snapshot of where your business stands financially at any given moment. One way to think about it is that bookkeepers lay the groundwork for accountants to analyze and prepare financial statements.
The Function of Bookkeeping
The CFO oversees everything regarding the financial health of a business. They are responsible for seeing the long-term situation and aligning the company’s day-to-day operations to align with business goals. With that being said, as time progresses, it is becoming increasingly the case that accountants hold at least a bachelor’s degree.
While there are certain similarities and overlaps between the two, there are distinctions that set these two roles apart. Bookkeepers don’t necessarily need higher education in order to work in their field while accountants can be more specialized in their training. Because bookkeepers tend to work for smaller companies, they may not be paid as much as accountants. Knowing the differences between the two can help people find their niche in the industry and can give guidance to companies on who to hire for their needs.
The general ledger is a basic document where a bookkeeper records the amounts from sale and expense receipts. A ledger can be created with specialized software, a computer spreadsheet, or simply a lined sheet of paper. Bookkeeping is the process of recording daily transactions in a consistent way, and is a key component to gathering the financial information needed to run a successful business. Most businesses rely on both types of professionals for smooth business functioning. Then that information is provided to the accounting team to pull insights and help with bigger picture considerations. The records reported by the bookkeeper will determine the accountant’s advice to leadership, and ultimately, the health of the business overall.
Your accountant will rely on your bookkeeper to keep accurate books so they must seamlessly work together to maintain top levels of financial health for your business. Although there is some overlap between the work of accountants what is the liability to equity ratio of chester and bookkeepers, most business owners can benefit from using both a bookkeeper and an accountant to manage their business’ financial affairs. Bookkeepers and accountants sometimes do the same work, but have a different skill set.
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While financial professionals may offer both services, you’ll need to determine which services your business actually needs and whether you should hire someone to handle both of these important tasks. The complexity of a bookkeeping system often depends on the size of the business and the number of transactions completed daily, weekly, and monthly. All sales and purchases made by your business need to be recorded in the ledger, and certain items need supporting documents.
How to decide if you need an accountant or bookkeeper for your business
The Bureau of Labor Statistics (BLS) expects 6% job growth in this field from 2021 to 2031. If all you need is to set up a financial record-keeping system for your new location, you can hire a bookkeeper. Some of them can produce financial documentation solutions that far surpass those you’d get from a typical accountant.
Bookkeeper or accountant: Which do you need?
This choice primarily depends on the industry and the level of expertise required. Their role is to analyze financial data, and they do this by identifying key financial indicators to reveal the big picture and show how the business is progressing. Even if you don’t have previous related experience, you can learn how to become a bookkeeper by taking courses. Comprehensive online courses like the Bookkeeper Launch will even teach you how to start your own bookkeeping business. Bookkeepers are usually responsible for documenting or checking financial data for a company or client, including checks received or written, invoices, cost spreadsheets, and monthly or quarterly revenue.
The NACPB offers credentials to bookkeepers who pass tests for small business accounting, small business financial management, bookkeeping and payroll. It also offers a payroll certification, which requires additional education. If you do end up hiring both of these roles, it’s critical that they have great communication and work well together.
If you are an external auditor, you will most likely have a job at a public accounting firm, and you will need to have a CPA license, plus a college degree, and often a master’s degree. Bookkeeping is a great starting point if you are interested in the field but not fully committed and want to test the waters. You may also be an ideal bookkeeping candidate if you want a good job with a respectable wage and decent security but may not be looking for a long-term career. Bookkeeping offers much lower barriers to entry, and the competition you face in the job search is less fierce. It is not an unusual career move for a bookkeeper to gain experience at a job, study, get certified, and work as an accountant. Accountants and bookkeepers work with numbers and financial data all day long.
Deciding between bookkeeping vs. accounting can be difficult because of the intersecting responsibilities of a bookkeeper and an accountant. Many small and midsize business (SMB) leaders find it challenging to decide who can meet their financial needs. Look online through reviews and think of your needs vs. the services offered. To make this process easier, Freshbooks services will help you find a qualified, experienced online accountant.