What Does a Bookkeeper Do?
Updated August 14, 2024
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Credit: Perawit Boonchu / iStock / Getty Images Plus
Bookkeepers provide the building blocks for accounting functions by sending invoices, creating journal entries, and monitoring cash flows. Corporations typically require bookkeeper applicants to have associate degrees to qualify. Professionals do not need certification, but they can pursue bookkeeping certificates to demonstrate their accounting proficiency to prospective employers.
Every industry keeps accounting records to manage expenses, income, and tax payments. Therefore, bookkeepers can find employment in almost any sector. Organizations may offer full-time, part-time, and contract roles in this field.
Companies of all sizes need accounting assistance, including multinational corporations and small businesses. Bookkeepers can help these businesses keep accurate accounting records and increase efficiency. Use this guide to answer the question, "What does a bookkeeper do?" while exploring relevant professional duties and career paths.
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Bookkeeper Duties
Bookkeepers assist with maintaining records and analyzing companies' financial health. Professionals may perform multiple tasks, including record-keeping, cash flow management, and payroll. Accounting department employees should have generally accepted accounting principles (GAAP) knowledge, logic, and the ability to pay attention to details.
Corporations may post bookkeeper classified ads, which typically list required skills such as proficiency in maintaining financial records, assisting with scheduling, and generating purchase orders. Their role may also include:
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Record-Keeping: Up-to-date journal entries help a company keep accurate financial data to track existing assets and liabilities. Bookkeepers may need to handle records for inventory, payments, and expenses. -
Reconciliation: Accounting can be complex as it includes depreciation, unrecognized revenue, and deferred taxes. Bookkeepers conduct reconciliations to ensure line items add up properly. -
Cash Flow Management: Companies need cash on hand to cover payroll, expenses, and taxes. Bookkeepers monitor cash balances and upcoming expenses to warn management of possible cash shortfalls. -
Payroll: Bookkeepers calculate salaries for employees, which must include overtime, paid leave, and bonuses. These professionals then process payroll and ensure they comply with local and federal regulations. -
Monitoring Accounts: Bookkeepers may monitor accounts receivable and payable to track payments. Corporations can maximize available cash and minimize interest expenses with careful account monitoring.
Key Hard Skills for Bookkeepers
- Technical Understanding: Companies use various applications to organize assets and create journal entries. Bookkeepers should understand basic financial software and adapt to new programs as necessary.
- Math: Accounting uses math in multiple ways, including calculating depreciation, tax rates, and forecasting expenses. Bookkeepers must have a solid understanding of basic math and monitor for mathematical errors.
- Invoicing: Invoices provide data for both parties within a transaction. Bookkeepers must understand how to create invoices, explain charges to customers, and organize existing orders.
Key Soft Skills for Bookkeepers
- Organization: Bookkeepers may deal with multiple daily tasks and data types. Organized professionals can prioritize their duties, ensure projects are completed on time, and organize data for easy retrieval.
- Memory: Bookkeepers must work with various data types and comply with GAAP. They need a solid memory to remember accounting rules and recall previous entries.
- Time Management: The accounting industry has deadlines to file taxes, pay customers, and receive payments. Bookkeepers must optimize their time to meet regulatory deadlines and reduce cash flow issues.
- Communication: Bookkeepers can work with other departments to monitor costs and understand expenses. Individuals with communication skills may excel at explaining expenses and communicating company finances to management.
Bookkeeper Jobs
Bookkeepers can focus on specific fields or industries to learn niche knowledge. Professionals with a unique industry understanding may have additional advancement opportunities.
Oil and Gas
The oil and gas sector has specialized accounting rules to organize expenses, oil reserves, and taxes. Bookkeepers working in this sector should understand relevant regulations and lease agreements. Individuals who specialize in this field can pursue entry-level bookkeeper and certified bookkeeper roles.
Bookkeepers within this sector typically report to accountants and senior management. Corporations may task these professionals with bank reconciliation, financial report writing, and/or governmental accounting. Individuals can advance their careers by mastering relevant accounting topics, creating accurate reports, and finding discrepancies. Organizations can promote bookkeepers to accounting manager or analyst roles.
Common Job Titles
- Bookkeeper
- Certified bookkeeper
- Accounting manager
- Volumetric accounting analyst
Manufacturing
Companies that transform raw materials into other objects must employ bookkeepers and accountants to maintain compliance with accounting regulations, monitor cash flows, and create entries for machinery depreciation.
Manufacturing bookkeepers need to accurately recognize goods throughout the production process, including raw materials, work-in-progress, and finished goods. Each stage requires various GAAP and recognition efforts.
Entry-level employees can start as a bookkeeper to gain accounting experience, learn inventory tracking systems, and understand the flow of large volume transactions. Professionals with relevant experience can pursue roles as a manufacturing accounting analyst or manager.
Common Job Titles
- Bookkeeper
- Production bookkeeper
- Manufacturing accounting analyst
- Manufacturing accounting manager
How Do You Become a Bookkeeper?
Many corporations require bookkeepers to have associate degrees in accounting or higher. A full-time enrollee can complete an associate degree within two years. Companies may accept experience in place of a degree, in some cases. Bookkeepers do not need formal credentials, but certified bookkeepers can demonstrate their mastery to prospective employers.
Bookkeepers can pursue a certified bookkeeper designation through the National Association of Certified Public Bookkeepers or the American Institute of Professional Bookkeepers. Each organization has different education and experience requirements for applicants. Certified public bookkeepers have mastered concepts like depreciation, payroll, and adjustment entries.
Bookkeeping Job Outlook and Salary
Bookkeepers earned an annual median salary of $47,440 as of May 2023, according to the Bureau of Labor Statistics (BLS). The BLS projects that bookkeeper employment will decline by 6% from 2022-2032. Corporations may need fewer bookkeepers due to evolving technologies, including advanced software and automated intelligence.
A career in bookkeeping may be a difficult choice because of the decline in future roles. However, bookkeepers can learn specialized skills and earn certifications to stand out among peers. Corporations may hire comparatively well-educated bookkeepers, especially if they provide additional niche knowledge compared to general accounting software.
Salaries vary based on location, experience, or specialization. For example, bookkeepers in Washington, D.C., earned an average salary of $64,390, while the same career paid an average salary of $40,240 in Alabama, according to the BLS.
Career Spotlight: Lauren Colson
Why did you become a bookkeeper? What initially interested you about the field?
I've always loved numbers — they just make sense to me. When I learned there was a profession where you could utilize numbers to tell a story and to make decisions in the business, I was sold!
What education did you need to pursue this career? How did it prepare you for bookkeeping?
You don't need an accounting degree to become a bookkeeper. My path led me to a degree in accounting and finance. I did learn some basic knowledge in my undergrad, but I gained the bulk of my experience on the job through doing. Nothing beats actually doing the work in the real world!
What was the job search like after graduating with your degrees?
I didn't go to what felt like the traditional route of going to a Big Four accounting firm. It just wasn't the right move for me. Searching for a job with zero experience was really difficult. There were a lot of companies that disqualified me based on that. I remember talking to the manager at my first job before they hired me. I was exhausted from the job search at this point.
When asked the dreaded question of, "What is your experience?" I replied, "I don't have any. But how am I ever going to get any experience if no one gives me a chance?" After a grueling interview process, they gave me the opportunity to be a staff accountant at this company.
What was the career path that led you to own a bookkeeping firm? What do you think helped you most on your journey?
After my role as a staff accountant, I moved to a financial analyst position and then to a controller position, all at larger publicly traded companies. I gained a ton of experience and enjoyed the journey, but I knew something was missing. I needed a way to be innovative and wanted to build something, and that just wasn't possible in the roles I had.
After much deliberation and a large salary cut, I moved to a startup and fell in love! I loved the culture and the entrepreneurial spirit everyone had. I even got to build the financial infrastructure of the company. I was in heaven! I was also surprised that what I came to build wasn't already built. It made me think, "Hmm, maybe there are other companies out there that need my help." This eventually led to the start of my business.
Creating and fostering relationships helped me the most on my journey. A lot of the success we had in the business early on came from my amazing network referring business our way.
“Bookkeepers and accountants have a reputation for being dull and dry. I'm here to tell you that there are plenty of us out there that have big brains and big personalities.”
What are some of the most rewarding aspects of working as a bookkeeper? Some of the most challenging aspects?
There is so much that is rewarding. Working with a client and being able to provide them with the information to make the best decisions for their business comes first. Owning a business is hard. When you have a partner [bookkeeper] that cares about your business, has your back, and is proactive… Well, there is nothing like seeing the joy that comes from our clients and the successes they have had with their businesses.
It's always challenging when you see a business that is not performing well. Sometimes, we have to be the ones to point something out: "Cash is dwindling." Or "Expenses are too high." Those are always hard conversations, but they are crucial. Sometimes, business owners are too close to the business or in a bit of denial and really need us to spell it out for them.
What do you think is the most important skill bookkeepers need to succeed?
The most important skill for a bookkeeper is critical thinking. Taking a step back from the doing and taking a holistic look at your work is one of the best ways to catch errors. Ask good questions. Spot trends. And be proactive!
What advice would you give to students considering becoming a bookkeeper?
First off, bookkeeping is the best! OK, I may be biased, but being a bookkeeper is such an important role that every business requires!
My advice would be to have fun along the way. Bookkeepers and accountants have a reputation for being dull and dry. I'm here to tell you that there are plenty of us out there that have big brains and big personalities. My team, for example — we're number geeks with people skills!
Lauren Colson
Lauren Colson is a numbers geek with over 13 years of financial experience. From large publicly traded companies to high-growth startups, these industries cultivated her passion. She knew she had a talent for helping other business owners. Now the owner of Colson Strategies, Lauren's rockstar team provides accounting and finance services ranging from bookkeeping to CFO. They take the "scary" out of your finances so you can focus on what matters most. Her purpose is to empower entrepreneurs with the tools to make the best decisions for their business. Lauren is more than a business owner. She is a mother of two, a coffee lover, and a book-reading, beach-loving mindset enthusiast.
Questions About Bookkeeper Jobs
How do I start a career in bookkeeping?
You can start a career in bookkeeping by completing an associate degree in accounting. Bookkeeper roles typically do not require certification or licensure. You may be able to pursue a career without a degree if you have relevant work experience and can demonstrate accounting knowledge.
Are bookkeepers in high demand?
Although every industry needs bookkeepers, the BLS projects a 6% decline in employment from 2022-2032 for the role. Corporations may need fewer bookkeepers due to the progress of accounting software and artificial intelligence.
Do bookkeepers make a lot of money?
Bookkeepers earned a median wage of $47,440 in 2023, according to the BLS. Professionals can increase their earnings potential by obtaining a certification, gaining experience, or pursuing a specialization.
Is it hard to be a bookkeeper?
Bookkeeping can be difficult as it requires time management, logic, and accounting skills. Successful bookkeepers may gain a sense of accomplishment from helping a company maintain accurate records, forecast cash flows, and complete financial reports.
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