Imagine a company or firm without a bookkeeper— their financial accounts will be in jeopardy. However, a bookkeeper helps to avoid the above-mentioned problem by recording and producing updated and accurate financial statements for businesses to aid their financial decision strategy development. In addition, bookkeeper service most times reports directly to business owners, managers, or supervisors. Stay tuned to learn about the bookkeeper software, the salary, and its certification.
What Exactly Does A Bookkeeper Do?
A bookkeeper tracks, creates, and records all business transactions like the exact amount, dates, gains, expenses, losses, and means of all the business revenues to help managers and business owners make important financial decisions. Bookkeepers assist firms and business owners find accurate answers to these questions,
- Is the business making a profit, or running at a loss?
- How much money?
- Is the business on sound financial grounds?
- Are there troubling trends in cash flow pointing to instability of any kind?
What Skills Do You Need To Become A Bookkeeper?
Bookkeeping as a career is a secure and rewarding path that paves the way for you to work in any industry across the world. Although responsibilities vary from job to job, there’s a wide range of core skills that all bookkeepers need to master.
- You must be good with calculations
- You need the knowledge and criteria of bookkeeping
- Top-notch customer service and relations
- Proficiency in Microsoft excel
- Productivity and a high level of accuracy
- Data entry skills
- Organization skills
- Time management
- Job skills, such as leadership, negotiation, and presentations
- Payroll management skill
Bookkeeper Service
Bookkeeper service is the act of recording and keeping track of the financial transactions of your business. The bookkeeper service is required to summarize the activity of your business regularly and gives you access to the software and the financial reports needed. These reports showcase the financial position as well as the performance of your business.
In other words, the bookkeeper service follows a double-entry system in which every transaction or event is recorded at least in two different nominal ledger accounts. Let’s have a look at some examples of the primary as well as secondary bookkeeper services imperative to your business:
#1. Data Entry
Data entry is nothing but the procedure to record financial transactions typically made into a computer from paper documents that contain information about the transaction to be recorded from invoices, purchase orders, sales receipts, and similar documents, which are usually kept on file for a specified length of time.
In essence, it is the maintenance of what comes in and what goes out of your business and helps you as a business owner and stakeholder to get a true and fair view of how your business performs.
#2. Maintaining Accounts Receivable, Payable, and Payroll
A bookkeeper service ensures that customers are invoiced and payments are collected from them on time. Besides this, the Bookkeeper service also collects information regarding transactions emanating from payroll, payment processing companies, expenses, and so on which is properly identified and categorized. In addition to maintaining accounts payable and accounts receivable, a bookkeeper also undertakes payroll services by calculating employee salaries, adjusting deductions, and ensuring that the net salaries are paid to the employees on the required due date.
#3. Reconciling Bank Statements
Bank reconciliation is the process of comparing financial transactions in your ledger account with the transaction showing in the company bank account to ensure there is agreement and balance and it reflects the actual situation at the end of an accounting period. A Bank reconciliation statement is crucial as it helps to fish out data entry errors or neglected transactions. In addition, reconciling bank statements on a monthly basis is of crucial importance in the management of cash flow.
Benefits of Bookkeeper Service
#1. Paying Your Bills on Time
With what you must do daily to move your business forward, it’s next to impossible to keep up to date on everything yourself. Putting a bookkeeper in charge assures you that everything is managed timely – and ensures your vendor relationships aren’t hurt by late payments.
#2. Sees Your Business from a Different Angle
Although you may think you have a handle on how your business is doing, it always helps to have a second set of eyes on the day-to-day operations. A skilled bookkeeper can run useful reports that quickly show you the money coming in and how you’re spending it. Having this visual representation of your cash flow can help you understand where you’re doing well and what you might need to improve.
#3. Maintenance of Cash Flow
Few things are less productive for a business than putting in the work but not getting paid for it. Being so busy that you neglect to bill your clients promptly is an excellent problem to have – except it affects your cash flow. A bookkeeper can stay on top of customer invoices and billing reminders, guaranteeing a steady stream of funds to meet your current obligations and fund your future business growth. With bookkeeping, you can identify money-making opportunities, avoid cash-flow problems, and find ways to increase income or lower spending.
#4. Manage Assets
Whether overseeing commercial real estate or compiling and safeguarding data, CPAs are uniquely equipped to manage your company’s assets. They play a crucial role in leveraging your interest by analyzing your competitors’ faring in your markets, assessing customer responses to your products and services, and identifying market patterns that lead to income fluctuations.
#5. Handle Taxes
One of the cornerstone benefits of hiring a CPA is their ability to prepare and file your taxes per local, state, and federal laws. Better yet, they can create a strategic tax plan for your business that helps you minimize your tax liability before tax time rolls around. No matter what type of business you have, compliance with business tax law is a must; so, be less anxious about your bookkeeping records if you find yourself facing an Internal Revenue Service audit.
Bookkeeper Software
Think of it as a smart electronic ledger that automates double-entry bookkeeping. Bookkeeper software commonly called accounting software is designed to record and process business transactions with accounting functionalities, e.g, payroll and credit card processing, invoicing, tax preparation, and keeping track of financial data needed to manage and eradicate the hassles of day-to-day bookkeeping and frees up your valuable time so you can focus on growing your business. In addition, bookkeeper software gives you access to your data, allows you to import product and contact data, and guides you step-by-step through setting up your company information. Let’s look at the features to consider when purchasing bookkeeper software,
Features of a Bookkeeper Software
Here is the list of non-negotiable features to keep in mind when purchasing a bookkeeping software
#1. Level of security
This feature is provided but it’s so imperative that you need to double-check properly before purchase. Bookkeeper software by definition handles financial data and handle other people’s personal data, for example, contact details for invoicing. Therefore, security is non-negotiable.
#2. Bank Recognition
Your business transactions flow straight into your accounts, hence every bookkeeper software you purchase should be able to link to your account without issues to enable you to make direct payments and import accurate data from your bank into your accounting system. In addition, the software should also be able to track all your account and reconcile them if you have more than one. Make sure your program includes a general ledger function and checkbook reconciliation like bank deposit, tax calculation, and check handling.
#3. Integrations With Others
Integrations have become a huge selling point for software packages and for good reasons. Bookkeeper software with the right integrations with others will save you even more time and money than packages without them.
#4. CRM Capacities
Modern bookkeeper software is essential as a customer-relationship-management tool for the financial side of your business. For example, it should be able to send out invoices automatically, follow up with reminders if necessary and highlight if there has been no response to those reminders.
#5. Cloud-Readiness
Many bookkeeper software has versions that are installed locally while some are used in the cloud. It is generally best to go for the bookkeeper software with a cloud version, which facilitates remote work and has relevance for SMEs.
Best Bookkeeper Softwares
Understanding the best one for your business will often depend on its capabilities, price tag, and industry suitability. After researching and comparing, here are my top picks for the best bookkeeper software for businesses.
- Best Overall: QuickBooks Online
- Best for Micro-Business Owners: Xero
- Best for Service-Based Businesses: FreshBooks
- Best for Part-Time Freelancers: QuickBooks Self-Employed
- Best Free Software: Wave
- Best for Automation-NetSuite
- Best for startups-Kashoo
- Best free software-Zoho Books
Bookkeeper Salary
One of the most important considerations of those who want to become a bookkeeper is the average bookkeeper’s salary. The average salary of a bookkeeper in the United States is $42,598 as of February 27, 2023, but the range typically falls between $38,100 and $47,287. Salary ranges differ widely depending on important key factors, including education, certifications, additional skills, and the number of years you have spent in your profession. In addition, some other factors affecting the salary of a bookkeeper are the size and location of the company, the bookkeeper’s responsibilities, the bookkeeper’s experience with accounting and other software, and the ability to get things done without supervision.
Bookkeeper Certification
Bookkeeper certification is an official demonstration of a person’s bookkeeping skills. It’s a way to show your skill set to potential employers and others in your professional network. You can earn a bookkeeper certification through a college, a university, or an accredited professional program. Outside of universities, certifications are available through the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) after you must have passed the four-part Uniform Certified Public Bookkeeper Examination, as well as acquiring an associate’s or bachelor’s degree in accounting. A bookkeeper certification not only adds value to your skill set but also helps you stay on top of the latest trends and technological advances in the industry.
How Long Does It Take To Be a Certified Bookkeeper?
Prior to earning either designation, you must prove that you have sufficient bookkeeping experience.
NACPB
To qualify for the CPB license, you need to accumulate a maximum of 2,000 hours or one year of experience in the field to be certified. CPB licensure lasts one year, after which you must demonstrate that you completed all necessary continuing education credits and pay an annual membership fee. CPB credentials require 24 hours of continuing education per year of licensure.
Requirements for bookkeeper certification are more extensive, as they ask for at least 3,000 hours of experience or two years of bookkeeping or accounting experience. To maintain the CB credential, you must fulfill 60 continuing education credits every three years.
How To Become A Certified Bookkeeper
The first step to becoming a certified bookkeeper is making the decision to do so regarding the fact that getting your credential is time-consuming, effort, and patience, but the career advantages you’ll gain are worth the effort.
#1. Review your level of education
It’s very important to check your current level of education when deciding how to with the aim to acquire the skills, become a competent bookkeeper, and meet the education requirements of the certification program. Examine whether you have the knowledge to be an efficient bookkeeper or if you have formal education or equivalent experience that could be applied towards becoming a certified bookkeeper.
#2. Know your need for credibility
As a financial professional, your credibility is imperative and a major factor in attracting or retaining clients. Therefore, your purpose in becoming a certified bookkeeper should be to enhance your credibility. Before selecting a bookkeeper certification program, you need to decide exactly what type of credibility you’re seeking. Do you want to be more credible across bookkeeping in general, or just for a particular software program?
#3. Estimate your time and capital
Time and capital are valuable resources, and you want to spend both wisely. Think about how much time you have available on a weekly basis and during the duration of the course, and whether a self-paced or structured schedule is best for you. Also worth considering is whether the exam itself is scheduled online or in person and how often it’s administered. The cost of the exam—including the enrollment fee, course materials including workbooks, and any administrative fees—should also be taken into consideration.
#4. Choose your certification program
Before jumping straight into either exam, you must first take a series of courses. Primary bookkeeping experience does not exempt you from taking preparatory courses. Completing courses and workbooks can help you prepare for and pass your bookkeeping exam. Hence, there are several bookkeeper certification programs available.
You can opt for a professional organization, such as AIPB or the NACPB, which offers rigorous training programs and the distinction of a certified bookkeeper (CB) or certified public bookkeeper (CPB) title upon successful completion of the program. Alternatively, If you’re an efficient bookkeeper, you might need to focus on one particular accounting software program.
Final Thought
A Bookkeeper is responsible for recording and maintaining a business’ financial transactions, such as sales, purchases, payroll, collection of accounts receivable, payment of bills, and more. After the recording of the transactions, the business owner reviews the work and makes the required adjusting entries before the company’s financial statements are distributed and earn a salary.
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