A Guide to Bookkeeping: Skills, Salaries, and Careers

Bookkeepers are important professionals in today's economic and financial fields. Every company, even a small one, requires bookkeeping to maintain a healthy financial position.

Financial institutions, investors, and the government need accurate bookkeeping accounting to make better lending and investing decisions. Bookkeeping accuracy and reliability are essential for businesses to succeed for staff, executives, customers, and partners.

Your job as a bookkeeper entails systematically keeping track of an organization's financial transactions. For the information to be reported as a financial statement, it needs to be identified, accepted, classified, and recorded. Learn more about bookkeeping, how it differs from accounting, the required qualifications, and bookkeeping jobs and salaries.

What is bookkeeping?

Bookkeeping refers to the process of recording an organization's financial transactions and maintaining accurate records. Transactions occur between organizations and their clients, customers, vendors, contractors, and employees. Examples of transactions include:

• Purchases

• Sales

• Receipts

• Payments

• Investments

Read more: What Is Bookkeeping? Getting Started in Accounting

Bookkeeping vs. accounting

In researching bookkeeping or bookkeeping accounting, you may come across information on accounting or find that bookkeeping and accounting are used interchangeably. While there is some overlap between bookkeeping and accounting, several factors distinguish these processes, as we explore in the table below.

Read more: How to Get a Job as an Accountant: 10 Tips

Does a business need a specialist bookkeeper?

Many businesses require the services of a bookkeeper. The size and scope of a business will determine whether the company needs a part-time bookkeeper, full-time specialist bookkeeper, or an entire accounting department. 

Bookkeepers play a vital role in the business accounting cycle by collecting and inputting data. As a detail-oriented professional, you would play a crucial role in the organization and growth of companies from small businesses to major corporations. 

A proper financial data management system can provide valuable, actionable insights and prevent problems, such as skimming fraud. As a bookkeeper, you oversee the first steps of the accounting cycle, while an accountant typically handles the last two. 

Capital management is critical for businesses. Every business step requires capital, from transforming an idea into a model to investing in its expansion. As a professional bookkeeper, you would keep track of a company's financial transactions and record them in the general ledger accounts.

Small businesses may prefer to handle their books themselves, but hiring a professional bookkeeper can be helpful. 

Bookkeeping tasks

Your primary responsibility as a bookkeeper is maintaining an organization's financial records. Today, most bookkeepers use computer software to create digital financial records. Some other tasks a bookkeeper may perform include:

Enter financial transactions.

You typically maintain accurate accounting records across all transactions while communicating with others. A bookkeeper's job comprises maintaining and balancing financial records, including transactions from coworkers. Effective communication is essential for recording those daily transactions.

Manage the general ledger.

Managing the general ledger is part of your daily responsibilities as a bookkeeper. You may determine if any payments are due, submit them, and record them in the financial ledger. As a bookkeeper, you may also receive client payments and deposit them at your company's financial institution.

Prepare bank deposits.

As a bookkeeper, you will verify and balance receipts, keep track of cash drawers, and check sales records. Bookkeepers also deposit money, cash checks, and ensure correct credit card transactions.

Create financial reports.

Your role as a bookkeeper will involve tracking an organization's profits and losses, as well as accounts payable and receivable documents. You'll compile this information in reports that summarize an organization's financial health.

Check for errors in reports.

A bookkeeper checks for errors when creating reports and managing the general ledger. You will check bank deposits for fraud, fix balance sheet errors, and maintain accurate payroll records. 

Manage payroll.

You may handle payroll functions as a bookkeeper, keep tax withholding records, and issue paychecks or send information to a contracted payroll service. Depending on the organization's size, keeping track of business expenses and reconciling business statements may be your responsibility.

What skills do you need to become a bookkeeper?

Having the ability to prepare an accurate financial picture of an enterprise and keep records organized is essential for being a bookkeeper. As a bookkeeper, you will need to learn how to create balance sheets, invoices, cash flow statements, income statements, accounts receivable reports, and more. Although software and calculators do most of the math, basic skills such as addition, subtraction, multiplication, and division are essential to helping you catch errors quickly.

To give you an idea of the technical and workplace skills employers are looking for in a bookkeeper, we consulted data from bookkeeper resumes, as reported by Zippia, and data from job descriptions, as reported by ZipRecruiter [1, 2]. Explore in-demand skills below.

Technical bookkeeping skills

• Using Quickbooks software appears in almost 11 percent of job descriptions and can correspond to performing payroll services, generating invoices, and managing business finances.

• Handling payroll tax returns appears on more than 12 percent of resumes and can entail posting daily activity, overseeing budgets, reconciling bank accounts, and compiling reports.

• Handling reconciliations appears on 10 percent of resumes and 10 percent of job descriptions. This can include bank reconciliations, HR support functions, journal entries, balancing ledgers, and more.

Workplace bookkeeping skills

• Customer service appears on more than 10 percent of resumes and can include such tasks as maintaining the confidentiality of assets and information, answering phones, scheduling client consultations, and managing office operations.

• Being detail-oriented appears on almost 9 percent of job descriptions, according to ZipRecruiter, and translates to the accuracy of the information you collect and use to determine the company's standing. You'll need to manage different types of financial information for clients, such as receipts, expenses, and reports, as well as spot reporting errors.

• Communication appears on over 6 percent of job descriptions and can include explaining financial information or concepts to clients and sharing financial insights with company leaders.

Integrity and trustworthiness are important qualities to cultivate as a bookkeeper. Keep an organization's financial data confidential and be transparent about your bookkeeping activities.

Pathways to a bookkeeping career

You can generally begin your career as a bookkeeper with a high school diploma or GED. However, some employers prefer to hire candidates with an associate or bachelor's degree. If you prefer not to pursue a degree, building your experience, taking relevant courses, and seeking an internship or training can help you qualify for roles in bookkeeping accounting.   

Complete your high school diploma or GED.

Getting a high school diploma is the first step toward becoming a bookkeeper. As a high school student, you may take mathematics, computers, accounting, and English courses. These will help you prepare for further training or employment.

Take courses or complete a professional certificate.

You can learn bookkeeping for free and at a low cost through online courses. These courses focus on bookkeeping fundamentals to help improve bookkeeping knowledge and skills. For example, you might complete the Intuit Bookkeeping Professional Certificate or several other bookkeeping courses offered by universities and companies on Coursera.

Seek an internship or training placement.

A few employers offer on-the-job training for bookkeepers by providing internships and placement programs. According to the US Bureau of Labor Statistics (BLS), most bookkeepers can learn the profession's basics in about six months [3]. Once you become a qualified bookkeeper, you can work as a permanent employee or freelancer.

Enroll in an undergraduate degree program.

It’s common for aspiring bookkeepers to earn a degree, even if only a high school diploma is needed. A bachelor's or associate degree in accounting is a beneficial choice for future bookkeepers because it helps you foster many skills necessary for the job. Since bookkeeper schools are few‌, prospective bookkeepers can find relevant degrees at local colleges and universities. You'll learn auditing, public accounting, and cost accounting with an accounting degree, which will help develop bookkeeping accounting skills and prepare you for bookkeeping careers. 

Earn bookkeeping certifications.

Bookkeeping is a crucial function of accounting, and earning a bookkeeping certification is a great way to show employers your expertise. While a certificate is not a requirement to become a bookkeeper, some professionals pursue certification to show their skills to employers and stand out in their job search.

You can earn certification from the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB). The NACPB offers a certified public bookkeeper (CPB) certification, while the CPB offers a certified bookkeeper (CB) certification. Both the CPB and CB certifications require similar eligibility requirements. You can earn either certification by passing a four-part multiple-choice exam, agreeing to abide by a professional code of conduct, and verifying your bookkeeping accounting education and experience.

Read more: Bookkeeping Certification: Benefits + How to Get One

NACPB's certified public bookkeeper (CPB)

CPB certification requires an associate or bachelor's degree in accounting. The minimum requirements include:

• Complete the Bookkeeping Certification course.

• Complete the Payroll Certification course.

• Complete the QuickBooks Online Certification course.

• Complete the Accounting Certification course.

• Verify, usually through a letter from your employer, 2,000 hours of bookkeeping experience.

• Agree to abide by the Code of Professional Conduct.

• Complete 24 hours of CPE credits each year after your license is issued.

Those with an associate or bachelor’s degree can substitute course requirements by submitting a transcript for approval. 

AIPB's certified bookkeeper (CB)

The American Institute of Professional Bookkeepers offers certification for experienced bookkeepers. You will learn how to record costs, value inventory, calculate depreciation, analyze financial statements, and use software programs. The courses cover bookkeeping, Microsoft Excel, business math, and payroll administration.

To become certified, you need to pass a four-part examination, show two years of full-time bookkeeping experience or 3,000 hours of freelance or part-time experience, and sign a code of ethics. 

While bookkeepers can sit for the CB exam sections in any order, AIPB recommends taking part one before scheduling part two. Continuing education is also required to keep certification. To maintain certification, you need to earn at least 60 continuing education credits every three years.

According to 81 percent of CBs who interviewed for a new job after becoming certified, having a certification contributed to getting the interview [4]. With a certified bookkeeper designation, you are qualified to perform all critical functions through the adjusted trial balance and basic payroll for small to medium-sized businesses. 

Read more: Bookkeeping Certification: Benefits + How to Get One

Average salary for bookkeepers

The median annual salary for a bookkeeper in the US is $45,560, according to the US Bureau of Labor Statistics (BLS) [5]. The top industries for bookkeepers had the following median annual wages, as reported by the BLS [6]:

Transitioning from bookkeeping to accounting roles

As of 2021, approximately 1.7 million people worked as bookkeeping, accounting, or auditing clerks. The BLS expects the field to have a 5 percent decline in growth from 2021 to 2031. Still, you should see 197,600 job openings each year over the next decade [3].

The expected job decline is primarily due to cloud computing and other software innovations automating bookkeeping tasks that a person would normally do. Specializing in a career field can help to set you apart and lead to career stability and longevity. You may also be expected to take on more advisory and analytical roles as bookkeeping becomes more automated.

Because of these factors, advancing your bookkeeping career to a role in accounting can be advantageous. For instance, the job outlook for accountants and auditors has a 6 percent growth rate from 2021 to 2031. The median salary for these roles is also higher than for bookkeepers at $77,250 per year [4]. 

Several career paths can lead to management and analyst positions in the field of accounting. As a bookkeeper, you record financial transactions, but accountants and auditors perform even more functions. They assess financial reports, verify the accuracy of the data, and then make recommendations based on the information they discover. Here are some tips to help you advance from bookkeeping to accounting roles:

• Accountants commonly need a bachelor’s degree. If you do not have your degree, consider returning to college either online or in person.

• Choose a specialty. Accounting is a large field with areas of specialization such as internal auditing, environmental accounting, or managerial and tax accounting. Decide which specialty fits your career goals.

• Decide whether you want to become a certified public accountant (CPA).

• Look for opportunities for continuing education. 

Read more: Should You Go Back to School? 7 Things to Consider

Learn more about bookkeeping with Coursera

Whether you are starting a career or seeking a change, start building job-ready skills in bookkeeping and accounting with Intuit's Bookkeeping Professional Certificate and Bookkeeping Basics on Coursera. In these programs, you can learn accounting principles, accounting software, payroll, how to prepare financial statements, and more.