A Guide to Bookkeeping: Learning the Skills

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Learn about bookkeeping accounting in the financial world. Find out more on bookkeeping accounting skills, how to earn accounting degrees and bookkeeping certifications, getting jobs, salary expectations, and more.

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Bookkeepers are among the most in-demand professionals in today's economic and financial fields. Every company, even a small one, requires bookkeeping because their work directly affects the financial position of an organization.

Financial institutions, investors, and the government need accurate bookkeeping accounting to make better lending and investing decisions. Bookkeeping accuracy and reliability are essential for businesses to succeed for staff, executives, customers, and partners.

Your job as a bookkeeper entails systematically keeping track of financial transactions. For the information to be reported as a financial statement, it needs to be identified, accepted, classified, and recorded. Learn more about bookkeeping, how it differs from accounting, the required qualifications, and bookkeeping jobs and salaries.

What is bookkeeping?

Bookkeeping is recording daily financial transactions and information relevant to a business, ensuring that you have a history of accurate and complete records of all financial transactions. An example of a transaction is the purchase, sale, receipt, or payment made by or made out to a business or individual.

Your skills in bookkeeping accounting allow a company to keep track of its investments, operations, and financial decisions. Accuracy is therefore essential.

Read more: What Is Bookkeeping? Getting Started in Accounting

Bookkeeping vs. accounting

The purpose of bookkeeping is to record a business' monetary transactions, whereas accounting allows collecting, analyzing, and retrieving critical financial information to determine a business's financial status. It further provides reports and insights needed to make good  business decisions.   

The accounting department prepares financial statements, asset liabilities, and the projected trends of an organization, upon the entry of financial transactions by bookkeepers. In accounting, bookkeeping data is analyzed, financial data is interpreted, and reports are created in a format that managers can use to measure the business's financial health.

Bookkeeping is primarily a transactional and administrative activity. It involves logging financial transactions daily and maintaining a ledger of daily transactions with daily updates. Bookkeeping systems vary ‌in complexity because of the size of the business.

Accounting is more subjective. It entails ‌analyzing bookkeeping data to produce financial reports and insight into financial health. It helps enterprises function better by turning ledger information into valuable insights. Accountants interpret, classify, analyze, document, and summarize the financial data collected during the bookkeeping accounting process.

Does a business need a specialist bookkeeper?

Many businesses require the services of a bookkeeper. The size and scope of a business will determine whether the company needs a part-time bookkeeper, full-time specialist bookkeeper, or an entire accounting department. 

Bookkeepers play a vital role in the business accounting cycle by collecting and inputting data. As a detail-oriented professional, you would play a crucial role in the organization and growth of companies from small businesses to major corporations. 

A proper financial data management system can provide valuable, actionable insights and prevent problems, such as skimming fraud. As a bookkeeper, you oversee the first steps of the accounting cycle, while an accountant typically handles the last two. 

Capital management is critical for businesses. Every business step requires capital, from transforming an idea into a model to investing in its expansion. As a professional bookkeeper, you would keep track of a company's financial transactions and record them in the general ledger accounts.

Small businesses may prefer to handle their books themselves, but hiring a professional bookkeeper can be helpful. 

Bookkeeping tasks

Your primary responsibility as a bookkeeper is maintaining an organization's financial records. Today, most bookkeepers use computer software to create digital financial records. Some other tasks a bookkeeper may perform include the following:

Enter financial transactions.

You typically maintain accounting records with extreme accuracy across all financial transactions while communicating with others. A bookkeeper's job comprises maintaining and balancing financial records, including transactions from coworkers. Effective communication is essential for recording those daily transactions.

Manage the general ledger.

It is part of your daily responsibilities as a bookkeeper, you may determine if any payments are due, submit them, and record them in the financial ledger. As a bookkeeper, you may also receive client payments and deposit them at your company's financial institution.

Prepare bank deposits.

As a bookkeeper, you will verify and balance receipts, keep track of cash drawers, and check sales records. Bookkeepers also deposit money, cash checks, and ensure correct credit card transactions.

Create financial reports.

Your career in bookkeeping will involve managing financial reports to track an organization's profits and losses. Accounts payable and receivable documents are also part of these financial reports. You'll use them to summarize an organization's financial health.

Check for errors in reports.

A bookkeeper checks for errors when creating reports and managing the general ledger. You will check bank deposits for fraud, fix balance sheet errors, and maintain accurate payroll records. 

Manage payroll.

You may handle payroll functions as a bookkeeper, keep tax withholding records, and issue paychecks or send information to a contracted payroll service. Depending on the organization's size, keeping track of business expenses and reconciling business statements may be your responsibility.

What skills do you need to become a bookkeeper?

Having the ability to prepare an accurate financial picture of an enterprise on paper or electronically is essential for being a bookkeeper. You should enjoy working with numbers since a certain math level is required. Here are some additional skills you may need to become a bookkeeper, including technical and workplace skills and the desire to understand how the business' finances work.

  • Math skills: Your career as a bookkeeper will be filled with ciphers and numbers. Therefore, you'll need to have a little more than elementary math skills to pursue this career. Although software and calculators do most of the math, basic skills such as addition, subtraction, multiplication, and division are essential to helping you catch errors quickly. Some positions may require more advanced mathematic knowledge so that you can use and understand complex formulas. 

  • Organization: The main reason for hiring a bookkeeper is to keep accurate and readable financial records, so organizational skills are essential. Being organized is a skill you can hone with practice and experience.

  • Detail-oriented: Accounting and management decisions are based on the financial data you collect. You'll ensure that the raw data is accurate and doesn't leave out any critical information so that you don't misrepresent the company's standing.

  • Managing information: As a bookkeeper, you'll need to be capable of managing financial information for clients, such as receipts, expenses, and reports.

  • Problem-solving: To reconcile income and expenses and calculate payroll, you'll use problem-solving skills. Bookkeepers use these abilities to address reporting errors.

  • Integrity: People at work trust in your abilities when you're considered the primary source of information. As a bookkeeper, you will need to be committed to honesty. Your data may be susceptible since it involves financial transactions. Keep matters at work confidential and transparent with the company.

  • Using bookkeeping software: To complete a task, you may need to use software. To be efficient, bookkeepers often use software that performs payroll services, generates invoices, and manages business finances.

  • Creating financial statements: As a bookkeeper, you will need to learn how to create financial statements, such as balance sheets, invoices, and accounts receivable reports.

  • Recording financial transactions: Bookkeepers keep track of financial transactions, such as receipts, revenues, and costs.

Pathways to a bookkeeping career

You can generally begin your career as a bookkeeper with a high school diploma or GED. However, some employers prefer to hire candidates with an associate or bachelor's degree. If you want to earn certification as a bookkeeper, you may need to have a bachelor's degree. If you prefer not to pursue a degree, building your experience, taking relevant courses, and seeking an internship or training can help you qualify for roles in bookkeeping accounting.   

Complete your high school diploma or GED.

Getting a high school diploma is the first step toward becoming a bookkeeper. As a high school student, you may take mathematics, computers, accounting, and English courses. These will help you prepare for further training or employment.

Take courses or complete a Professional Certificate.

You can learn bookkeeping for free and at a low cost through online courses. These courses focus on bookkeeping fundamentals to help improve bookkeeping knowledge and skills. For example, you might complete the Intuit Bookkeeping Professional Certificate or several other bookkeeping courses offered by universities and companies on Coursera.

On-demand video lectures, homework exercises, and community discussion forums are available in several free courses on Coursera. Paid courses, on the other hand, include quizzes and assignments and a certificate at the end of the course.

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professional certificate

Intuit Bookkeeping

Launch your career in bookkeeping. Gain the professional skills you need to succeed in the bookkeeping field. No degree or prior experience required.

4.5

(1,980 ratings)

38,652 already enrolled

BEGINNER level

Average time: 4 month(s)

Learn at your own pace

Skills you'll build:

Double-Entry Bookkeeping System, Bookkeeping, Bank Reconciliations, Accounting Concepts and Measurement, Basis Of Accounting, accounting software, Accounting Cycle, Creating Financial Statements, Accounts receivable and cash receipts, Inventory costing methods, PP&E Accounting, Asset Accounting, Depreciation, Accounts Payable and Payroll, Owner’s Equity and Owner’s Draw, Accounting, Long-Term Liabilities and Note Payable, Accounting for Liabilities and Equity, Cash Flow, Bank Reconciliation, Financial reports analysis, financial statement analysis

Seek an internship or training placement.

A few employers offer on-the-job training for bookkeepers by providing internships and placement programs.  According to the US Bureau of Labor Statistics (BLS), most bookkeepers can learn the profession's basics in about six months [1]. Once you become a qualified bookkeeper, you can work as a permanent employee or freelancer.

Enroll in an undergraduate degree program.

It’s prevalent for aspiring bookkeepers to earn a degree, even if only a high school diploma is needed. A bachelor's or associate degree in accounting is a beneficial choice for future bookkeepers because it helps you foster many skills necessary for the job. Since bookkeeper schools are few‌, prospective bookkeepers can find relevant degrees at local colleges and universities. You'll learn auditing, public accounting, and cost accounting with an accounting degree, which will help develop bookkeeping accounting skills and prepare you for bookkeeping careers. 

Earn bookkeeping certifications.

Bookkeeping is a crucial function of accounting, and earning a bookkeeping certification is a great way to show employers your expertise. While a certificate is not a requirement to become a bookkeeper, some professionals pursue certification to show their skills to employers and stand out in their job search.

You can earn certification from the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB). The NACPB offers a certified public bookkeeper (CPB) certification, while the CPB offers a certified bookkeeper (CB) certification. Both the CPB and CB certifications require similar eligibility requirements. You can earn either certification by passing a four-part multiple-choice exam, agreeing to abide by a professional code of conduct, and verifying your bookkeeping accounting education and experience.

NACPB's certified public bookkeeper (CPB)

CPB certification requires an associate or bachelor's degree in accounting. The minimum requirements include:

  • Complete the Bookkeeping Certification course.

  • Complete the Payroll Certification course.

  • Complete the QuickBooks Online Certification course.

  • Complete the Accounting Certification course.

  • Verify, usually through a letter from your employer, 2,000 hours of bookkeeping experience.

  • Agree to abide by the Code of Professional Conduct.

  • Complete 24 hours of CPE credits each year after your license is issued.

Those with an associate's or bachelor’s degree can substitute course requirements by submitting a transcript for approval. 

AIPB's certified bookkeeper (CB)

The American Institute of Professional Bookkeepers offers certification for experienced bookkeepers. You will learn how to record costs, value inventory, calculate depreciation, analyze financial statements, and use software programs. The courses cover bookkeeping, Microsoft Excel, business math, and payroll administration.

To become certified, you need to pass a four-part examination, show two years of full-time bookkeeping experience or 3,000 hours of freelance or part-time experience, and sign a code of ethics. 

While bookkeepers can sit for the CB exam sections in any order, AIPB recommends taking part one before scheduling part two. Continuing education is also required to keep certification. To maintain certification, you need to earn at least 60 continuing education credits every three years.

According to 81 percent of CBs who interviewed for a new job after becoming certified, their certification contributed to getting the interview [2]. With a certified bookkeeper designation, you are qualified to perform all critical functions through the adjusted trial balance and basic payroll for small to medium-sized businesses. 

Average salary for bookkeepers

The median annual wage for a bookkeeper in 2022 was $45,560 [3]. The top industries for bookkeepers had the following median annual wages, as reported by the US Bureau of Labor Statistics (BLS) [4]:

*All salary data sources from the US Bureau of Labor Statistics (BLS) as of June 2022

IndustryBookkeeping Salary
Finance and insurance$46,910
Professional, scientific, and technical services$46,640
Wholesale trade$45,930
Health care and social help$41,100
Retail trade$37,710

Transitioning from bookkeeping to accounting roles

As of 2020, approximately 1.6 million people worked as bookkeeping, accounting, or auditing clerks [3]. The BLS expects the field to have a -3 percent decline in growth from 2020 to 2030. Still, you should see 170,200 job openings each year over the next decade.

The expected job decline is primarily due to cloud computing and other software innovations automating bookkeeping tasks that a person would normally do. Specializing in a career field can help to set you apart and lead to career stability and longevity. You may also be expected to take on more advisory and analytical roles as bookkeeping becomes more automated.

Because of these factors, advancing your bookkeeping career to a role in accounting can be advantageous. For instance, the job outlook for accountants and auditors has a 7 percent growth rate from 2020 to 2030 [4]. The median salary for these roles is also higher than for bookkeepers at $77,250 per year. 

Several career paths can lead to management and analyst positions in the accounting field. As a bookkeeper, you record financial transactions, but accountants and auditors perform even more functions. They assess financial reports, verify the accuracy of the data, and then make recommendations based on the information they discover. Here are some tips to help you advance from bookkeeping to accounting roles:

  • Accountants commonly need a bachelor’s degree. If you do not have your degree, consider returning to college either online or in person.

  • Choose a specialty. Accounting is a large field with areas of specialization such as internal auditing, environmental accounting, or managerial and tax accounting. Decide which specialty fits your career goals.

  • Decide whether you want to become a certified public accountant (CPA).

  • Look for opportunities for continuing education. 

Read more: Should You Go Back to School? 7 Things to Consider

Learn more about bookkeeping 

Whether you are seeking or starting a career change, start building job-ready skills in bookkeeping and accounting with the Bookkeeping Professional Certificate and Bookkeeping Basics on Coursera. If you enjoy solving clients' problems and are detail-oriented, consider these programs that let you learn at your own pace and gain hands-on practice.

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professional certificate

Intuit Bookkeeping

Launch your career in bookkeeping. Gain the professional skills you need to succeed in the bookkeeping field. No degree or prior experience required.

4.5

(1,980 ratings)

38,652 already enrolled

BEGINNER level

Average time: 4 month(s)

Learn at your own pace

Skills you'll build:

Double-Entry Bookkeeping System, Bookkeeping, Bank Reconciliations, Accounting Concepts and Measurement, Basis Of Accounting, accounting software, Accounting Cycle, Creating Financial Statements, Accounts receivable and cash receipts, Inventory costing methods, PP&E Accounting, Asset Accounting, Depreciation, Accounts Payable and Payroll, Owner’s Equity and Owner’s Draw, Accounting, Long-Term Liabilities and Note Payable, Accounting for Liabilities and Equity, Cash Flow, Bank Reconciliation, Financial reports analysis, financial statement analysis

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course

Bookkeeping Basics

This is the first course in a series of four that will give you the skills needed to start your career in bookkeeping. If you have a passion for helping ...

4.6

(1,723 ratings)

47,067 already enrolled

BEGINNER level

Average time: 1 month(s)

Learn at your own pace

Skills you'll build:

Basis Of Accounting, accounting software, Accounting Cycle, Creating Financial Statements, Double-Entry Bookkeeping System

Related articles

Article sources

1. US Bureau of Labor Statistics. "How to Become a Bookkeeping, Accounting, or Auditing Clerk, https://www.bls.gov/ooh/office-and-administrative-support/bookkeeping-accounting-and-auditing-clerks.htm#tab-4." Accessed April 26, 2022.

2. The American Institute of Professional Bookkeepers. "The Certified Bookkeeper Designation: National Certification for Bookkeepers page 2, https://aipb.org/certification-program/." Accessed April 26, 2022.

3. US Bureau of Labor Statistics. "Bookkeeping, Accounting, and Auditing Clerks, https://www.bls.gov/ooh/office-and-administrative-support/bookkeeping-accounting-and-auditing-clerks.htm." Accessed April 26, 2022.

4. US Bureau of Labor Statistics. Accountants and Auditors, https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm?sf22149547=1%3Fsk%3Dorganic?sk=organic." Accessed April 26, 2022

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