Bookkeeping might have a bit of an old-school ring to it, but the methods bookkeepers use and the duties for which they are responsible are changing at an incredible rate. Much of this can be attributed to the rise in the popularity of bookkeeping software and the astounding advancements these software companies have made. While this has made the life of the average bookkeeper both easier and more rigorous, it is still a career firmly founded on organization, timeliness and communication. Below is the complete bookkeeper job description, but if you want to put theory to practice, check out this in-depth introduction to bookkeeping course.
Duties And Responsibilities
Let’s hash out a description of the day-to-day duties and responsibilities of a bookkeeper. Then we’ll look at the broader roles involved; that is, the ones that are not likely to be managed through bookkeeping software.
- Prepare and update financial statements and reports; usually on a monthly or quarterly basis.
- Record debits and credits accordingly; maintain and update the ledgers.
- Receive and record invoices, vouchers, cash, checks, etc.
- Manage client activity and assets.
- Reconcile the trial balances; find, analyze and correct discrepancies.
- Prepare tax documents as appropriate; knowledge of 1099s and W-2s is usually essential.
- Experienced bookkeepers will help determine budgeting. Not experienced? Get free advice from this blog post on accounting concepts that everyone should know.
- Organize scheduling for employees, partners, clients, etc. This will include travel arrangements and other calendar balancing.
- Manage the office inventory, especially the most vital supplies and materials; i.e. those things necessary for the operation of the office.
- Draft purchase orders for requests relating to equipment, materials, etc.
- Almost inevitably, there will be additional miscellaneous duties assigned to the bookkeeper that will be unique to the employer.
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While staying on top of ink supplies and being cordial with clients is important, a bookkeeper tends to be judged by his or her ability to organize and manage a company’s financials. This is probably the most time consuming task of a bookkeeper’s life. Even a relatively small business requires an enormous amount of work to keep the accounting accurate. Every payment, deposit, invoice and bill needs to be recorded. And not just the monetary amount: date, client, invoice, number and details apply to everything. You might not think this sounds too bad, but after the first few weeks these turn into hundreds or even thousands of transactions, and, as you’re about to see, any inaccuracies will soon be found out.
Every month or quarter, a company reconciles its accounts. This means that it creates a report of all transactions that actually happened. Many times orders are canceled or modified, checks arrive late, the bookkeeper presses the wrong number, etc. and mistakes are made. These mistakes have to found and corrected and every transaction recorded in that period must be perfectly accurate so that taxes can be filed, budgets can be accurate, etc.
Reconciling accounts is not what I would call fun (speaking from personal experience). But it is satisfying to complete and invaluable to an organization. So the more organized you are throughout the period, the easier your life will be when it comes time to reconcile accounts. Learn the techniques you need with this financial accounting course that runs through the basics of the accounting cycle, inventorying, depreciation, and more.
The Bank, And Details Galore
Let’s look at an example of how a bookkeeper would handle a deposit. First of all, a bookkeeper can expect to get very familiar with the local banks’ tellers. Who else do you think is going to make deposits?
So when you go to make a deposit, you will first need to know what accounts it is balancing. A large check of $50,000 might be used to balance twenty accounts. Do you know how to enter this into the accounting program so that the deposit is entered as a lump sum into the bank account yet split appropriately between the different credit accounts? You can’t ask the CEO every time you make a deposit; the bookkeeper must know which incoming payments are going to correspond to which outstanding balances. This is literally your job.
The Almighty Budget
This what separates the men from the boys, the women from the girls: budgeting. As complicated as keeping track of all the financials is, it isn’t enough for the average bookkeeper. You can’t just go about your work blindly. You have to be able to comprehend the numbers you are entering and understand the fundamental state of a company’s budget. Fortunately, software makes it easy to see how much money is being spent on every account. Still, as a professional bookkeeper, expect to have frequent meetings with managers and department heads to discuss budget.
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Bounced checks are completely unacceptable, especially for a company that has cash to spare. Monitoring and balancing available funds is a daily task. Businesses have certain accounts that are devoted to certain things. Making sure these accounts have the necessary funds for all immediate expenses is just part of being professional. Again, if it sounds easy, it’s probably deceptive. A lot of money can be moving back and forth, with checks for deposits and withdrawals pending and going through on a daily basis. Knowing when and how these affect accounts is vital.
If you were hoping to avoid important interactions with your co-workers, I hate to break it to you, but communication is very important for bookkeepers. Almost all of your financial information will come from co-workers, so you have to be able to get to the bottom of any misunderstandings in an efficient and amicable way. If not, you risk not only your professionalism, but the accuracy of your bookkeeping.
Think about when it comes time to reconcile accounts. I guarantee you there will be mistakes; it’s absolutely inevitable. So how are you going to sort these things out? Through communication. You will have to contact the department responsible and work together to figure out where things went wrong. But this can be a great place to distinguish yourself from other applicants. Give yourself an advantage with this five-star course on how to create a 1000 watt presence.
Being well-organized and having a knack for understanding financial information can have its rewards, but they might not be as wonderful as you would expect. Whereas an entry-level job for a good accounting firm can net $100k a year, bookkeepers are much farther down on the food chain. Sure, a certified bookkeeper who has a lot of experience with accounting software can charge over $65,000 a year in base salary (although a broader range is probably $50,000-$70,000). And if you’re really good and work for a large company, no doubt you can make a lot more than that. But your average bookkeeper working for a growing company is looking at $35,000-$50,000 a year. Livable, but no king’s ransom.
Still, a bookkeeper is a good way to get your foot in the door at a company you respect and a great way to gain experience dealing with financials. Round out your accounting resume with this SAP Financials software course.