Have you ever wondered what a bookkeeper does all day? Bookkeepers are the lifeblood of any business. Because it’s the law, all businesses must keep a record of their financial transactions, but it’s also vital because knowing where cash flows in and out of the business is the only way to know if it can continue to operate and produce a profit.
In this post, we will look at how to become a bookkeeper and what bookkeeping jobs include.
What is a Bookkeeper?
A bookkeeper is a professional who is employed to keep an accurate and complete record of all financial data for firms. Because bookkeepers have access to a company’s bank accounts to report transactional activity, this profession requires a high level of trust and accountability. They are comfortable with figures, spreadsheets, and computer software, and they are incredibly organised when it comes to tracking payments and deposits. It is critical that bookkeepers create accurate reports since significant decisions will be based on the data they give.
While a bookkeeper’s job differs depending on whether they work for a small business, a huge organisation, or themselves, daily activities are the same. Billing is one of the most visible duties, as it involves delivering invoices to clients on a regular basis, keeping track of when payments are due, and following up with customers and suppliers on bills.
Payments must then be deposited, and a record of this is kept in the company’s financial ledger. In addition to invoicing, bookkeepers scan and file receipts in order to maintain an electronic record of all corporate purchases made by personnel. This may entail reimbursing employees for expenses such as travel, business meals, and hotel stays. Keeping an ordered system for all expenses allows bookkeepers to accurately report on spending and assists firms in assessing their outgoings, making cuts, and allocating budgets. All of this should be reviewed with department heads and business owners. As a result, regular contact is essential.
Bookkeepers must comprehend budget requirements and limits, as well as overhead and inventory requirements, such as rent and office supplies, in order to justify outgoings. As a result, they’ll spend a significant portion of their working day in meetings, making phone calls, and sending emails to relevant coworkers or clients.
What Does a Bookkeeper Actually Do For My Business?
Recording and managing financial data is more sophisticated than just pasting receipts into a spreadsheet, and bookkeepers are responsible for a wide range of activities in addition to simple data entry.
Bookkeepers must have a thorough understanding of and expertise with specific accounting software in order to be proficient in their jobs. This enables them to generate advanced data records capable of delivering a wide range of precise statistics on everything from gross profit to specific expenditures. Bookkeepers are also in charge of data reconciliation, which involves ensuring that records match bank statements and cash transactions.
A bookkeeper’s other responsibilities and tasks will include:
- Interest and investment calculation
- Managing Commercial Repayments
- Keeping an asset depreciation journal
- Putting money aside for corporate taxes
- Creating invoices
- Keeping track of buying orders
- Obtaining payment from debtors
- Making a report on aged debtors and creditors
- Customers’ cheque payments
- Suppliers and creditors, such as HM Revenue & Customs, must be paid.
What Qualifications Do You Need to Become a Bookkeeper?
The good news is that most professionals are qualified at the diploma or certificate level, so you don’t need to go to university to become a bookkeeper. While you can get an entry-level job without any qualifications, employers will normally want you to be familiar with basic bookkeeping practises.
As a result, it is essential that you obtain a recognised bookkeeping qualification before commencing your job search to ensure career success. This is also necessary if you want to be taken seriously as a self-employed bookkeeper. Fortunately, most bookkeeping courses can be completed online, allowing you to obtain the necessary certifications in your own time and space.
When looking into courses, you should first see if they are certified by a reputable awarding authority, such as The Institute of Certified Bookkeepers. The ICB is the world’s largest bookkeeping institute, offering approved courses through various learning providers. Once qualified, you can join the ICB to receive ongoing support from their network and to advance your professional standing. In the industry, ICB bookkeepers are highly regarded.
To get started, take the ICB Level 2 Certificate in Bookkeeping to learn the fundamentals of double-entry bookkeeping. Most students will then advance to the ICB Level 3 Bookkeeping and Accounts to learn about reconciliation and account management. At Oxbridge, you may enrol in both the Level 2 and Level 3 courses as a package, providing the best value for students interested in becoming ICB associate bookkeepers or working in payroll.
How Does One Become a Bookkeeper?
There are several paths into accountancy rather than a single typical career path. Here are some of the most common entry points into the field of bookkeeping:
- Studying to become a bookkeeper by taking an online course.
- Participate in an apprenticeship with a company that will provide on-the-job training.
- Transfer from another position inside the same organisation (for example, administration).
- Apply for an entry-level bookkeeping position and receive on-the-job experience.
The most flexible and cost-effective path to a career in bookkeeping is to study a bookkeeping course with quality instruction, where you can get the skills and qualifications required to enter the field. The Institute of Certified Bookkeepers (ICB) and the AAT are the most widely recognised bookkeeping qualifications.
There are several internationally recognised bookkeeping courses that you can take to have a sound foundation in the field of bookkeeping. These are some examples:
- ICB Level 2 Certificate in Bookkeeping
- AAT Level 2 Foundation Certificate in Bookkeeping
- ICB Level 3 Certificate in Bookkeeping & Accounts
- AAT Level 3 Advanced Certificate in Bookkeeping
Obtaining a certificate is an excellent method to demonstrate your dedication to potential employers and to equip yourself with the abilities required to become an entry-level bookkeeper.
What Skills Do You Need to Become a Bookkeeper?
Being good at maths is obviously the most significant aspect of bookkeeping! We’re not talking about algebra or geometry here, just basic old-fashioned numeracy. Furthermore, when working with numerical data, you must pay close attention to detail to ensure that your calculations and reports are correct and devoid of human mistakes.
Fortunately, bookkeepers use specific IT software to increase their efficiency. As a result, having knowledge and familiarity with computers is advantageous, and most bookkeeping courses will teach you how to use the necessary software. Maintaining financial records is still a time-consuming activity, therefore you should be skilled at time management as well.
Bookkeepers are comfortable starting conversations and leading discussions with a wide range of people since they engage with a wide range of colleagues and professionals on a daily basis. It’s also important to be personable and easy to comprehend, not only confident in spoken and written communication. You must be able to explain financial information to department heads in layman’s terms so that everyone concerned completely understands the situation. As a result, bookkeepers are extremely trustworthy, exercising discretion when necessary and keeping sensitive information secret to only those who need to know.
They can report on anything that appears to be wrong and suggest a solution since they have an analytical mind and good judgment. However, above all of these skills, bookkeepers must be eager to learn. Because software and bookkeeping practises are constantly evolving, it is the bookkeeper’s responsibility to stay current so that you can provide the best method to support your employer or client’s firm.
How Much Does a Bookkeeper Make?
The average yearly income for employed bookkeepers in the UK is £25,000 – £27,000, but this varies depending on the size of the company and the industry. If you prefer to manage your own bookkeeping business, you must be willing to work your way up. The more experience you have, the higher your hourly rates will be; freelance bookkeepers often charge between £15 and £30 per hour.
So, depending on whether you wish to work full- or part-time, you may earn more than £50,000 per year if you work a 40-hour week at the maximum rate. Remember that positive client evaluations and feedback on your website will also make a big difference!
What Is The Difference Between a Bookkeeper and an Accountant?
In the most basic terms, an accountant is a money professional who can advise you on all monetary elements of a business. A bookkeeper, on the other hand, is a data-entry specialist whose major responsibility is to create and maintain correct business records. A bookkeeper’s data is frequently used by business owners and accountants to make financial choices.
Bookkeeping is a subset of accounting, which is likely where the confusion stems from and can be performed by an accountant or by an individual with bookkeeping skills. They frequently generate financial reports for businesses and tax returns, offering the most fundamental and necessary financial framework from which more advanced accounting practises can be carried out.
What Career Progression Can You Expect as a Bookkeeper?
There is definitely room for advancement for bookkeepers, whether you want to become an industry specialist or a manager controlling a large number of accounts and bookkeepers. Generalists provide a wide range of services to all types of clients, whereas specialist bookkeepers work with specific firms, providing tailored and industry-specific services. The advantage of going with this method is that you can tailor your services to match the individual needs of your clients, enhancing your value above and above that of the usual bookkeeper. This provides you an advantage when competing for work opportunities with other freelancers.
A specialist bookkeeper, for example, might focus on retail, construction, and trade, or media and entertainment, to mention a few. This is due to the fact that, while the activities of a bookkeeper remain the same, different sectors face unique financial issues that must be addressed. Generalist bookkeepers, on the other hand, can work with a diverse set of clientele.
With continued professional development and additional skills, bookkeepers can also work as accountants and payroll managers.
Can I Start My Own Bookkeeping Business?
Absolutely. You can work in any firm in-house or set out on your own as a single trader, working for a variety of companies. You’ll need to ensure that you have all of the necessary software to execute the work effectively and that you can clearly explain to potential clients what you can offer.
You’ll need to register your firm with HMRC, manage your own taxes, and perform all of the other duties that come with being self-employed.
Do You Need a License to be a Bookkeeper in the UK?
A money laundering licence, commonly known as AML – Anti Money Laundering, is required to work as a bookkeeper. If you don’t have this, starting a bookkeeping business from home is against the law.
Licence holders are provided with a variety of information and guidance to assist them in fulfilling their AML obligations.
You can apply at any time of the year. Applications are reviewed and processed within 28 days.
Do I Need Qualifications to be a Bookkeeper?
Some people begin their bookkeeping careers with a secondary school diploma and then learn everything else on the job. However, furthering one’s knowledge is unquestionably beneficial. A college diploma is not required.
How Do You Get a Job as a Bookkeeper in the UK?
To get started, take the ICB Level 2 Certificate in Bookkeeping to learn the fundamentals of double-entry bookkeeping. Most students will then advance to the ICB Level 3 Bookkeeping and Accounts to learn about reconciliation and account management.
Is Bookkeeping a Good Job UK?
A job in bookkeeping may be right for you if you’re a logical thinker with a knack for numbers. It not only has outstanding prospects and a high earning potential, but it also allows you to work flexibly.
Can a Bookkeeper Submit Tax Returns UK?
A bookkeeper can also handle payroll, prepare VAT forms, and prepare and file tax returns, among other things.
How Do I Start a Bookkeeping Business From Home UK?
Unless you are forming a limited company, you must register as self-employed with HMRC. Then you must pick whether to work from home or at an office. There are likely to be additional costs associated with establishing an office space, with rental charges being one to consider.
How Long Does it Take to Learn Bookkeeping?
When newly employed bookkeepers begin their new responsibilities, they should expect to get six months of mentoring and even classroom training. While pursuing postsecondary degrees or credential programmes, some ambitious professionals may pursue internships or practicums.
Conclusion
The easiest method to learn about bookkeeping employment in your region is to conduct a job search. Bookkeepers are always in demand, and part-time or remote positions are frequently available. I feel this guide has done enough justice to this term and will also guide your every move throughout your career.
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