Bookkeepers are entry-level clerks who perform the record-keeping duties needed to compute and classify data on transactions. Becoming a bookkeeper is a good starting point to learn how accounting information is calculated, received, posted, and verified.
Organizations need to have their accounting books in proper order to defend every financial report they produce, including the dreaded tax returns, and to avoid sinking penalties or an audit. That’s why bookkeeping is critical for the storage of financial documents and monitoring of overall business health.
Salary
The Bureau of Labor Statistics reports that America’s 1.5 million bookkeepers and accounting clerks made a mean yearly salary of $42,960, or $20.65 per hour. Those employed by insurance companies earn more at $52,180, but bookkeepers claim an even bigger average income of $69,080 from the U.S. Postal Service. The District of Columbia and Massachusetts are the top-paying states with means at $55,970 and $49,040 respectively.
Beginning Salary
Newly hired bookkeepers can expect a starting salary of around $25,870. However, career mobility is strong for experienced bookkeepers to bring home more than $62,410 annually or advance into more lucrative titles. Earning a Master of Science in Finance could boost your bookkeeping knowledge to land financial management jobs where yearly salaries range from $68,370 to $181,980.
Key Responsibilities
Bookkeepers are skilled clerks who are responsible for recording a business entity’s cash flow to produce and update reports used by more senior financial staff. They log into online software to develop efficient, accurate spreadsheets and databases that post finances. Bookkeepers use their mathematical prowess to track company spending, revenue, accounts payable and accounts receivable. They oversee the entire organization’s ledger to give management a precise picture of profits or losses. Bookkeepers may also have the authority to send cash or checks to banks and clients for seamless payments. It’s their duty to double-check every column for accuracy and reconcile any figures that are inconsistent.
Necessary Skills
Successful applicants for bookkeeping jobs need the financial know-how to tell debits from credits and expenditures from receipts. Basic mathematical skills, especially addition and subtraction, are crucial to avoid relying too heavily on calculators that are vulnerable to human error. Bookkeepers need analytical skills to review the arithmetic and find any errors that could turn costly. Computer skills are imperative in the 21st century since accounting software helps produce the majority of reports. Being detail-oriented with good organizational skills is another must to put the right financial ducks in a row without error. Bookkeepers also need integrity and honesty to oversee documentation for large sums of money without misappropriation.
Degree and Education Requirements
Minimal post-secondary education is required to land this entry-level finance job. Bookkeepers typically have a vocational diploma or associate degree in bookkeeping, accounting, financial services, or auditing from an accredited community college. Smaller firms could hire individuals with solely a high school diploma or GED and six months of on-the-job training under a supervisor’s wing. Heading to a four-year college for a bachelor’s degree is only requisite for bookkeepers wishing to become accountants or financial analysts with greater responsibility. Those who start as bookkeepers could eventually work toward the 150-hour CPA requirement with master’s degrees, such as an MBA.
Pros and Cons of the Position
Bookkeeping certainly isn’t the most glamorous of financial services careers, but clerks could receive both advantages and drawbacks. On the positive side, bookkeepers have a healthy income potential for very low post-secondary education requirements to save on tuition and interest-accruing loans. Bookkeepers often have the freedom to telecommute from home with outsourcing firms as their own bosses. It’s also possible to choose from various industries from construction to banking and insurance. On the other hand, investing in added training is usually mandatory for upward progression. Bookkeepers spend most of their day behind a desk doing repetitive tasks that could have physical effects like eye strain. Staying abreast of new financial regulations and software can be challenging for some. Bookkeepers also could have long hours in a company’s peak or tax season.
Getting Started
Becoming a competitive applicant for open bookkeeping positions begins with taking courses in mathematics, statistics, and business throughout high school. Consider taking online tutorials to learn about the complex bookkeeping software used today to generate balance sheets. Post-secondary education is suggested, but hands-on experience can help sharpen your know-how for double-entry bookkeeping too. Review the AICPA database to search for internships with firms like Plante & Moran LLP and Rehmann Robson P.C. Once you’ve shaped an entry-level resume with an associate degree, begin applying for jobs online and through sites like LinkedIn. At the two-year mark, you may consider building more credibility by becoming a Certified Bookkeeper (CB) through the American Institute of Professional Bookkeepers. This involves scoring at least 75 percent on a 50-question exam testing concepts from payroll to accruals.
Future Outlook
Business is a numbers game, so there will always be a need for companies of all sizes to keep accounting books detailing each financial transaction. The problem is that technology is transforming the bookkeeping sector with software like Xero and QuickBooks taking over jobs. Demand is plummeting because automated computing solutions reduce the need to have a bookkeeper on staff. The BLS projects that over 65,000 bookkeeping jobs will be cut by 2028 for a four percent decline. Keep in mind there are still over a million bookkeepers nationwide though, especially at small businesses that can’t afford accountants. Look for slightly sunnier prospects in healthcare, wholesale trade, insurance, government, and business consulting.
Overall, bookkeepers implement a basic business function of creating financial reports about transactions based on receipts, invoices, and bills. Working as a bookkeeper may not be your ultimate goal, but the experience could springboard you forward in other financial careers. Bookkeepers could advance as credit analysts, auditing directors, account managers, data analysts, and public accountants.
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