Every company – big or small – is required by law to keep clear and accurate financial records. While a large organization might have a full-fledged accounts department, most small or medium-sized companies usually work with a bookkeeper.
The terms bookkeeper or bookkeeping are fairly well known, but for most laypersons, the details of the job remain unclear. In this article, we provide some clarity.
What does a bookkeeper do?
The main job of a bookkeeper is to track the money going in and out of the company and to maintain clear records of all financial transactions. This includes:
- Processing and recording transactions such as sales, purchases, payroll, collection of accounts receivable, payment of bills, and more.
- Prepare year-end tax and VAT returns
- Work with an accountant or the business owner to create and file accurate and up-to-date financial records.
Many people use the word bookkeeper and accountant interchangeably, but while they both work in the same field, there are some key differences.
An accountant takes over from the bookkeeper and is in charge of making adjusting entries and preparing the final financial statements of the company. Based on the books-of-accounts prepared by the bookkeeper, an accountant advises the company’s management regarding the financial impact of its decisions.
A bookkeeper, on the other hand, is a person who manages the day-to-day financial tasks of the company. As the in-house financial wizard, his/her role is extensive. He/she must keep an impeccable paper trail of all financial transactions and use this to prepare financial statements, thus ensuring that the accountant has all the information to file annual returns smoothly.
4 Reasons why bookkeeping is an excellent profession
There are plenty of reasons to take up bookkeeping as a career, but here we list a few that prove to be enticing for most people –
- It is a stable career – a good bookkeeper will never be out of work. All businesses, regardless of their size, require someone to track and manage their daily financials. Mismanaged accounts can lead to serious loss to the company, sometimes even resulting in closure. A bookkeeper is the first line of defense against any financial problems. Hence, most companies are always on a lookout to hire and retain talented and qualified bookkeepers.
- Flexible working environment – it allows for lots of time and location flexibility and is a great ‘work from home’ option.
- Don’t need a college degree to get started – there are many entry points into the professions, you don’t need to pursue a specific degree. There are several excellent courses and associated certifications that can provide a good start.
- Career growth options – starting as a bookkeeper is just the first step into the world of financial management. There are plenty of ways to get ahead – you can study for a degree and become a charted accountant and rise up to the position of a Chief Financial Officer, or you can start your own bookkeeping business. For a talented professional with a head for numbers, the opportunities in the field are many and varied.
How does one become a bookkeeper?
The best way to start your bookkeeping career is with a professional course. You can study a range of bookkeeping, payroll, and accounting qualifications through experienced companies. Along with study options, you must try to get on-the-job training or internship to understand the practical application of the subjects.
With recognized qualifications, you can either register yourself as a bookkeeper and set up your own freelancing or consultancy business or join an organization as a bookkeeper. You also have the option to continue your studies in the field of accountancy.
If you have a knack for managing money, enjoy problem-solving and love numbers, then a career in bookkeeping can be immensely rewarding. Do talk to our advisors to find out how you can get started.
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