Bookkeeping is the activity of keeping records of the financial affairs of a business, ensuring that the records of individual financial transactions are correct, up-to-date, and comprehensive.
They will report and track those financial transactions, with reports that show how well the business is doing.
Accuracy is absolutely vital in this as each transaction, whether it be a purchase or a sale, must be recorded.
All of this provides the information from which accounts are prepared, and there are usually set structures for this in bookkeeping called ‘quality control’.
For businesses to be successful, they need to be balancing the books every single month, otherwise, they may struggle to pay for things like stock, suppliers, and even their taxes.
Bookkeeping is the first part of the accounting process, meaning the work of bookkeepers and accountants often overlaps.
While bookkeeping focuses on recording and organising financial data, accounting will interpret and present that data.
They both support the business in different stages of the financial cycle.
As touched upon in the firstsegment, a business will not be able to run for very long without balancing the books and sound knowledge of finance.
By balancing the books, it means they can correctly calculate how much tax is due throughout the year, to avoid running into any trouble with HMRC.
It also allows a business to prepare for its financial year, allowing them to think about what the next moves are. That could be growing the business, or even setting up a limited company.
Two foundational tasks in business bookkeeping are data entry and bank reconciliation, but here are what a bookkeeper’s day-to-day tasks could be:
You are not required to have a degree to become a bookkeeper, but there are qualifications that can help you get started in the field.
There are a couple of awarding bodies that offer plenty of bookkeeping courses that you can do with us.
The Institute of Certified Bookkeepers (ICB) is the largest bookkeeping institution in the world, offering certificate, and diploma courses. The courses will highlight your experience and competence within the bookkeeping profession.
An ICB-accredited qualification will help you become a fully-fledged bookkeeper, all from the comfort of your own home.
Take a look at the ICB courses we offer here at Open Study College.
Meanwhile, AAT is one leading membership organisations for over 120,000 accounting professionals. They offer a range of bookkeeping qualifications, with the highest certificate allowing the bookkeeper to use the AATQB letters after their name.
The qualifications are highly sought after, as they demonstrate practical, real-world accounting knowledge that employers will love.
Find out more about the AAT courses we offer.
When starting out as a bookkeeper, according to the National Careers Service, the average salary is £18,000. Meanwhile, an experienced bookkeeper will earn on average £35,000 per year.
Bookkeepers can become accounting technicians over time, allowing them to take on more complex work. They can also set up their own bookkeeping business and become self-employed. A more experienced bookkeeper can use that experience and the knowledge gained from years in the industry to teach in a further education college. Finally, they may take a degree in higher education and qualify as an accountant.
Bookkeepers have to be accurate when it comes to handling a business’s financial data, which is why attention to detail is vital. By not making mistakes or errors in the financial records, it allows companies to make critical decisions with correct data.
Communication is an important skill for most job roles, and bookkeeping is no different. Depending on the size of the business you work with, the type of communication will vary, but what will remain the same is the need to present clear and coherent information.
Bookkeepers will deal with a business’ confidential financial data, so they have to act with both integrity and transparency. They must abide by a company’s policy set to protect their data, ensuring that all transactions adhere to these guidelines.
Invoicing is the process of itemising a transaction between a buyer and a seller, explaining each charge on a bill. Bookkeepers will be helped in finding information about a transaction if they know how to read invoice documents.
Keeping track of financial information, recalling past information, noticing any errors in files, and answering client questions can all be helped with good memory. It can also help when needing to recall an exact figure to solve a bookkeeping problem.
Bookkeepers will need to solve problems and come over challenges with company records by using critical thinking. It means they can then look at the meaning of the records and identify any trends, patterns, or even irregularities in the business transactions. It could be a discrepancy in a financial report, or an unrecognisable invoice, a bookkeeper will need to use critical thinking to find the route of the problem and use analytical skills to find a solution that doesn’t compromise the business or their employer.
Bookkeeping is a versatile career path, and it’s likely over time that a bookkeeper’s role will change to suit the needs of a business. However, they need to be committed to embracing the change and new responsibilities. Managing the books is a big responsibility as well, and it needs commitment. A bookkeeper may also work for several companies, but it’s vital that they give their full commitment and attention to each client when working on their files.
Following through when agreeing to finish a project with a strict deadline needs discipline, and it’s an important skill to possess if you’re going to be a successful bookkeeper. It allows you to have a solid work ethic to provide accurate information consistently.
Being able to keep one eye on the future and understand how each action a bookkeeper makes could affect the business. They should be able to analyse their options with that in mind before deciding on the best course of action and having solid commercial awareness will certainly help this.
This is a pretty obvious one because bookkeepers work with numbers, so of course, they’re going to need numeracy skills. While they don’t need to be geniuses when it comes to maths, however, basic addition, multiplication, and division skills will help in the field of bookkeeping. However, calculators, spreadsheets, and software will help complete these tasks quicker than ever before.
Being able to input data quickly and accurately into forms and bookkeeping software will help when it comes to being a bookkeeper. Spreadsheets are often used to record financial data and being able to use these can certainly be beneficial. Popular software like Sage, QuickBooks, and Xero have made it much quicker and easier for bookkeepers to keep accurate records.
Bookkeepers will work with a range of clients, from customers to senior management, and they need to be able to deal with each with a top level of professionalism. Being able to manage complex relationships with effective communication, timely responses, and, simply, fantastic customer service will help surpass expectations.
No day will be the same for a bookkeeper, so it’s important they are able to stay on track with effective organisation and time management. Having strong organisational skills will allow them to maintain financial records with a specific system so that they can access them easily. It’s also important bookkeepers are able to structure their schedules to complete all of their tasks.
