If you have a strong understanding of payroll processing and compliance, you might consider becoming a Payroll Specialist. Exploring these specialized roles can allow you savings account fees: what they are and how much they cost to focus on areas you’re passionate about and further develop your expertise. Books and online resources are valuable tools for self-study and continuous learning.

Her work has appeared on Business.com, Business News Daily, FitSmallBusiness.com, CentsibleMoney.com, and Kin Insurance. When doing the bookkeeping, you’ll generally follow the following four steps to make sure that the books are up to date and accurate. Remember that each transaction is assigned to a specific account that is later posted to the general ledger.

• Accounting and bookkeeping software requires each journal entry to post an equal dollar amount of debits and credits.
• You’ll post three common financial transactions to your accounting system.
• It is indispensable to have a knowledge of accounting and to understand how to use accounting software systems.
• When a worker makes a sale, they post the transaction and customer number.

Now that you understand how to become a bookkeeper, you are ready to get started on your new path. Whether you are already in the bookkeeping field or just starting out, this guide can help you determine your next steps. If your prospective bookkeeper does, you should consider what you’d do if they’re sick or call out for other reasons—have a backup plan in case your bookkeeper is out of office.

Write a business plan

As you post transactions, you need to post the information to the correct accounts in your bookkeeping system consistently. Maintain an updated chart of accounts to post your accounting information to the right places. On the other hand, the cash method posts revenue and expenses based on cash inflows and outflows.

She is passionate about economic development and is on the board of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a Content Operations Manager and Copywriting Manager at Fit Small Business. Laura is a freelance writer specializing in ecommerce, lifestyle, and SMB content. As a small business owner, she is passionate about supporting other entrepreneurs, and sharing information that will help them thrive. The Certified Public Bookkeeper (CPB) license is accredited by the National Association of Certified Public Bookkeepers (NACPB).

Free, self-paced, and designed for part-time completion in six weeks, edX's course covers topics including banking processes, payroll, ledger accounts, and reconciliations. The Association of Chartered Certified Accountants developed this course. Candidates for CB certification must submit evidence of at least two years of full-time bookkeeping experience or 3,000 hours of part-time or freelance experience. Bookkeepers can complete this experience before taking the bookkeeping certification exam or up to three years after passing the exam. Start building the professional skills you need to get a job as a bookkeeper in under four months with the Intuit Bookkeeping Professional Certificate on Coursera.

• Even if you aren’t planning on growing any time soon, you need to have a sense of how much money is coming in versus what is going out.
• Many small businesses start out by outsourcing bookkeeping services, but depending on your needs, you may also consider hiring a full time bookkeeper as an employee at your business.
• Once candidates are hired as employees, they will be provided with training assignments and other resources that prepare them for their positions.
• Read on to learn how to hire a bookkeeper, tips and questions to ask, and the benefits of handing over the work to the pros.

Most businesses use an electronic method for their bookkeeping, whether it’s a simple spreadsheet or more advanced, specialized software. Usually, the entry-level salary for both bookkeepers and accountants tends to be similar; however, the earning potential of an accountant tends to increase as their career progress. It is not uncommon for an experienced bookkeeper to make a career transition into accounting or another profession. As bookkeepers work closely with raw data, they tend to develop a good understanding of how a business works.

First Career Path to Become a Bookkeeper: Earn a Degree

The AIPB and NACPB also provide resources about how to become a bookkeeper, as well as suggestions that might make you more competitive in your search. For instance, you may decide to pursue additional licenses or certifications. Some aspiring professionals may pursue internships or practicums while pursuing postsecondary degrees or certificate programs.

How do I start a career in bookkeeping?

There are high stakes when managing a business’s financial statements, which can lead to stress. However, if you have a rigorous organizational system and a solid knowledge of rules and regulations, it can be straightforward and easily manageable. These exams test your knowledge of analyzing business transactions, payroll taxes, financial statements, and more. Although you don’t need a bachelor’s degree, it can make you more competitive. Only 12% of entry-level bookkeepers have a bachelor’s degree, so having one is an easy way to gain an advantage. Consider a bachelor’s degree in accounting, business administration, or finance.

An accountant is the one to help the business owner make sense of their numbers, generate financial documents, and plan for the upcoming tax period. Accountants are required to have advanced certification, while bookkeepers are not. Some bookkeepers, especially those with bachelor's degrees in accounting, may decide to become certified public accountants (CPAs). CPAs have similar job responsibilities to bookkeepers, but must also analyze data, suggest best practices, and make predictions. Customers schedule an appointment to have a bookkeeper review their transactions, and  multiple schedules are available to choose from.

What are some of the most rewarding aspects of working as a bookkeeper? Some of the most challenging aspects?

If you’re not tracking daily expenses, you’ll have very little information to give to your accountant and they won’t be able to make informed decisions. If you’re only focusing on expenses and not big-picture financial data, you’ll miss out on some strategic opportunities. Accountants advise leadership on how to make more strategic financial changes that save the company money or generate more profit. For some of the businesses that they do, accountants also need to be registered certified public accountants (CPAs). Bookkeeping is the daily financial tracking of all of your daily financial transactions.

You will need to learn how to start a bookkeeping business in your location, such as how to file for a license if you choose to have an in-person office. Bookkeeping is a great place to start if you’re hoping for a way to break into the finance industry. There are many bookkeeping job opportunities and generally fewer education requirements than in other finance and accounting positions. With experience, additional education, and certifications, bookkeepers can transition to roles such as senior bookkeeper, accounting manager, or financial analyst.

A bookkeeping certificate can help you find a bookkeeping role, either as an in-house bookkeeper or as a freelancer. Bookkeeping lays the groundwork for many accounting processes, so you can use your experience and knowledge as a stepping stone to becoming an accountant. However, you will likely need to complete a degree program and other certifications to be an accountant or move beyond a bookkeeping role.

To meet the requirements for the CPA exam, some professionals enroll in master's in accounting programs. Other bookkeepers finish their high school diplomas and then seek on-the-job training. To prove they possess certain skills, they may also complete one or both professional bookkeeping certificates available.