How to Become a Bookkeeper
Becoming a bookkeeper will involve acquiring some form of education in the field, and knowledge and mastery of the tasks you will be facing.
Education For Bookkeeper Positions
You do not necessarily have to have a four-year degree to become a bookkeeper, however, the rule of thumb is that when competing for jobs, someone with at least some formal education will have an advantage. There are a few ways to become knowledgeable about bookkeeping. Community colleges offer courses in bookkeeping, as do vocational schools, and online platforms. The internet is rife with opportunities to take classes and enroll in workshops and webinars. For example, here is an in-depth look at one option you have to enroll in and take free classes and courses from a reputable resource. Beware, do not confuse these courses with degrees granted by accredited degree-granting universities and colleges. However, it is one way you can begin today to learn about bookkeeping and start your journey towards the job of your dreams.
Once again, do not confuse the name of the entity with a bona fide university. However, in their own words, “OpenLearn’s free learning resources are core to our social mission. We believe that the main barriers to starting education are access, lack of confidence and cost. This is why the Open University works to remove these barriers. We offer a number of free finance courses, one of which is an eight-hour long course entitled Introduction to Bookkeeping and Accounting.” Here is OpenLearn’s description of the program.
“The student will learn about the essential numerical skills required for accounting and bookkeeping. This free course, Introduction to Bookkeeping and Accounting, explains the fundamental rules of double-entry bookkeeping and how they are used to produce the balance sheet and the profit and loss account. After studying this course, you should be able to:
- Understand and apply the essential numerical skills required for bookkeeping and accounting;
- Understand and explain the relationship between the accounting equation and double-entry bookkeeping;
- Record transactions in the appropriate ledger accounts using the double-entry bookkeeping system;
- Balance off ledger accounts at the end of an accounting period, and
- Prepare a trial balance, balance sheet and a profit and loss account.”
The first part of the program is comprised of essential numerical skills required for bookkeeping and accounting, namely: the use of BODMAS and brackets, the use of calculator memory, rounding, fractions, ratios, percentages, negative numbers and the use of brackets, the test of reasonableness, table of equivalencies, and manipulation of equations and formulae.
The second part of the program is entitled “Double Entry and the Balance Sheet.” Students learn how to understand and explain the need for financial records and financial statements, understand the business entity and the dual aspect concepts, define assets, liabilities and capital, understand and explain the relationship between the accounting equation and double-entry bookkeeping, record transactions in the appropriate ledger accounts using the double-entry bookkeeping system, understand a simple balance sheet in a vertical format, balance off accounts at the end of an accounting period, and how to prepare a trial balance.
The third and final section of the 8-hour course is entitled “Double Entry and the Profit and Loss Account” and teaches the student how to understand the difference between generating cash and making a profit, understand how profit relates to owner’s capital in the balance sheet and the accounting equation, understand what the profit and loss account is, measure profit and loss, account for closing stock, and state the double-entry rules for income accounts and expense accounts.
Know Exactly What it is You Will be Doing and Get Good at It
As much as possible, become familiar with the job of bookkeeping. You can learn how to do many of the tasks here by taking online courses and seminars. Also, if you become familiar with the software involved, you will have a firm grasp on the platforms via which you can accomplish the following goals.
- Know How to Record Financial Transactions
- Know How to Post Debits and Credits
- Know How to Reconcile Accounts
- Know How to Manage Accounts Receivable and Accounts Payable
- Know How to Prepare Financial Statements
- Know How to Assist Your Employer/Client with Budgeting and Forecasting
- Know How to Comply with Tax Requirements
- Know How to Maintain Financial Controls
- Know How to Prepare Financial Reports and Analysis
As a bookkeeper you will be required to record financial transactions such as purchases, sales, receipts, and payments in related software. Some of the software available includes QuickBooks, Xero, FreshBooks, Wave, Zoho Books, Sage 50cloud Accounting (formerly Peachtree Accounting), and MYOB. Most of these platforms offer free introductory classes. Begin to become familiar with the software you will eventually need to utilize in order to record financial transactions.
Transactions are categorized into different accounts such as assets, liabilities, equity, revenue, and expenses. You will need to learn how to ensure that debits and credits are properly balanced.
You will need to learn how to reconcile bank statements, credit card statements, and other financial records to ensure that they match the transactions recorded in the accounting system.
Learn how to track outstanding invoices, follow up on overdue payments, and make sure that bills and invoices are paid on time.
Your job will include generating financial statements, i.e. income statements, balance sheets, and cash flow statements. Learn how to present this information to those who will need the data.
Learn the ins and outs of preparing budgets and forecasts based on historical financial data and current business trends to assist your employer/client with financial planning and decision-making.
To some degree, you will need to learn the various state and federal laws regarding tax laws and regulations. This can be accomplished by keeping accurate records and preparing tax returns or providing information to tax professionals.
Research and learn how to establish and maintain internal controls to safeguard the organization’s/employer’s/client’s assets and prevent fraud or financial mismanagement.
You will need to be able to provide your organization or client with customized reports and analysis in order to help management understand financial performance, identify trends, and make informed business decisions.
Job Outlook for Bookkeepers
According to the U.S. Bureau of Labor Statistics (https://www.bls.gov/), Bookkeepers have less than average opportunities for the time period spanning 2022-2032. The field is declining -6% per year, which is in contrast to the 6% average growth rate with other professions. However, in spite of this, government experts predict that each year over 183,900 openings will become available (between 2022-2032), due to replacing workers who leave the profession, leave the work force and/or retire. Those openings are more than twice the openings currently being experienced in the majority of professions. In 2022 there were 1,735,800 individuals working as bookkeepers. The median pay per year was $45,860, while the median hourly wage was $22.05. (As a reminder, the “median” amount is not an average, it is the middle value of a dataset. For the U.S. BLS definition go to: https://www.bls.gov/cps/definitions.htm#medianearnings).
Begin Today!
You aspire to enter a competitive profession—be prepared to meet the challenges. Learn how to perform the duties mentioned above, utilizing formal educational avenues, online opportunities and free instruction. Consider getting an entry-level position in order to hone your skills and develop self-confidence. You can do anything you set your mind to, begin today becoming the very best bookkeeper possible!
