Choosing the Right Accountant

Is it hard to become a bookkeeper?

Are you a spreadsheet whiz that loves spending all day highlighting cells in the most impressive colours?

Is your mission to convert everything you do into data and formulas?

If this is you, imagine having a job that lets you work from the comfort of your own home while playing with numbers all day. A job that gives you the freedom to work as much or as little as you want, whenever you want. Even if you have no experience and no qualification.

All you need are good computer skills, a passion for numbers and be ready to help business owners dealing with their most dreaded task: a box full of receipts.

Did you know an Entrepreneur named bookkeeping as one of the most profitable online small businesses?

The low overhead and next-to-nothing startup cost combined with the $80+ per hour rate help it land this coveted title.

And that’s why, if you’re in the market for a new online career, I highly recommend starting a virtual bookkeeping business.

Even if you have absolutely zero professional bookkeeping experience, you can get started with this in-demand, high-paying, remote-friendly career path. Here’s how.

If you have a love of numbers and technology, are detail-oriented, analytical and a good planner, then you stand to do well as a bookkeeper. Fortunately, the reasons to become a bookkeeper go much further than a personality match. Bookkeeping is a field with solid growth, good pay and flexible entry requirements. The field is versatile, with plenty of room for introverts, extroverts, and everyone in between.

What does a bookkeeper do every day?

Bookkeepers manage and track income and expenses for companies and small businesses. As a bookkeeper, you will be responsible for the recording of any financial transaction and for helping businesses to keep track of how much money comes in and goes out every month.

Your daily tasks could include:

  • recording sales
  • filing receipts
  • reconciling expenses
  • managing payroll
  • managing bills payments
  • producing financial reports for record-keeping purposes

After the recording of the transactions, an accountant will normally review the bookkeeper’s work, analyze the data and make the adjustments needed before submitting the accounts.

So, what is the difference between a bookkeeper and an accountant?

The biggest difference between accounting and bookkeeping is that accounting involves interpreting and analyzing data, and bookkeeping is all about recording transactions.

So…is bookkeeping hard to learn?

You’re not going to like this, but the answer is both yes and no. And while this might sound confusing at best, we promise you it will all make sense after you learn what bookkeeping involves. So let’s dive right into it…

Industry

Depending on your industry, the expertise and diligence required to maintain your books will vary. This is one reason that the question “Is bookkeeping hard?” is more nuanced than it might appear.

Time

Given a lot of free time, many (not all) business owners are more than capable of doing their bookkeeping. But business owners often wear multiple hats and need to perform a list of high-level tasks for their business to run properly. Trying to divide your time between higher-level tasks and bookkeeping can create a stressful situation. Often it is the bookkeeping that gets neglected, which brings us to our next point…

Consistency

Keeping books consistently is the key to creating a smooth experience. If you don’t have the time, the drive, the mindset or the know-how to stay on top of your books–you will find that bookkeeping is ten times the task it should be. Trying to dig through records and transactions from months past is a quick way to transform yourself into an archaeologist, only there will be no exciting temples full of treasure or new dinosaurs to name–only stale transactions.

Enjoyability

Bookkeeping is not for everyone. A survey which polled over 500 australian small business owners, discovered that bookkeeping is their most hated, with the next most hated task falling a whopping 24% behind. You are not alone if you don’t enjoy categorizing transactions. And no task (even if simple) is “easy” when you not only don’t like doing it but hate it.

Longevity

Bookkeeping is repetitive, and a sometimes (okay, a loaf times) mind-numbing task. If you are someone who does not have the patience or a marathoner’s attitude, you will quickly find yourself burning out on the task.

Communication

Chron.com writes:

“Durham Technical Community College reported that the most difficult part of their job was not maintaining financial records, which accounted for 50 per cent of their time. It was communicating with colleagues. Bookkeepers must maintain and balance financial records daily, including transactions from coworkers.”

Whether you’re looking into becoming a bookkeeper for employment, or you’re a business owner looking to manage your finances–proper bookkeeping will require you to engage with your employees to understand the businesses’ transaction history better.

That’s because we haven’t gotten to the crux of the matter just yet. As any good scientist will tell you, theory and practice are two completely different concepts. And while we’d venture to say that in theory, many business owners are more than capable of accomplishing their bookkeeping, in practice, many fall short.

How much does a bookkeeper make?

Did you know that according to Entrepreneur Magazine, bookkeeping is the #1 most profitable business you can start from home?

As an entry-level bookkeeper, you can expect to earn anything between $18 to $23 per hour. Which means you could earn around $40,000 per year as a rookie.

But remember, this is how much you can normally make if a company employs you. If you work from home as a freelancer, according to QuickBooks, you can earn $69 to $82 per hour, once you gain experience.

This incredible earning potential is what makes bookkeeping a strong option to consider if you want to work part-time or full-time from home. Whether you want to make some extra money or want to build a virtual bookkeeping business without working too many hours, bookkeeping could be the perfect choice for you

What qualifications do you need to become a bookkeeper?

Believe it or not, you don’t need any specific qualifications to start your bookkeeping business. And you don’t need to be a Certified Public Accountant (CPA) or have an accounting degree to start a profitable virtual bookkeeping business.

But if you want to become a bookkeeper, you will need some very specific skills and qualities to help you to excel.

Check out the list below, and if this sounds like you, you are guaranteed to succeed as a bookkeeper.

Bookkeeping skills you need:

  • Basic computer skills: yep, nothing unusual here. These days you need this skill for every job you decide to take on.
  • Organised: if you are the kind of person that likes to colour-code cells, and like me, you need everything to be in its box, bookkeeping might be perfect for you. You’ll be dealing with lots of numbers and documents daily. And being on top of everything is essential.
  • Eagle-eye for details: you will be responsible for the recording of important financial information. The last thing you need to do is to enter the wrong number in the wrong cell. Clients want to know that they can trust you to manage their books and make zero mistakes. So if two numbers don’t add up, you need to be quick to spot that.
  • Multi-tasker: if you are working as a virtual bookkeeper, you’ll probably work with more than one client. This means you’ll need to be able to quickly switch from one set of accounts to another in a matter of hours. You will also need to be able to prioritise the urgent tasks for each business you look after.
  • Charming: ok, you don’t need to be the life of the party. You don’t have to go to the party at all, as you’ll be working from home. And most bookkeepers are genuine introverts. But you need to be somehow likable to be able to create good relationships with your clients, even if you talk via emails.
  • Determined: starting a bookkeeping business isn’t going to happen overnight. This is something you need to be prepared to work hard for. Bookkeeping takes time and effort. It can be extremely rewarding, like any business, but you can’t be lazy and procrastinate about the tasks you need to do if you want to be successful. Don’t give up at the first sign of struggle, or you’ll never make it.

One thing that could help you to get started the right way is to get some bookkeeping training under your belt.

Here are solid reasons you should consider to become a bookkeeper.

Plenty of jobs are available in bookkeeping.

Bookkeeping median annual salary as the economy grows, so do bookkeeper jobs. Growth is predicted at 11 per cent from 2012 to 2022, according to the Australian  Bureau of Statistics. This translates into 37,000 job openings annually.

Bookkeepers are in demand everywhere, so no matter where you go, your prospects are good. You also have plenty of job choices by industry. About 12 per cent of bookkeepers work in professional, scientific and technical services. Many others work in retail trade, wholesale trade, health care and social assistance, and finance and insurance. You could have the opportunity to find work at a company that gives you ideal work-life balance and career progression.

Technology and bookkeeping go hand in hand.

Bookkeeping is not a career where technology makes jobs obsolete. Businesses need bookkeepers more than ever to maintain financial books and ensure their accuracy. Technology only steps in to make the job easier. For instance, bookkeepers deal with fewer paper checks due to bookkeeping software and the rise of electronic banking.

You control your career.

With bookkeeping, you could get to take control of your career. Get started right away, and work as much as you need to. Many folks enter the field with a high school diploma or some college education, although plenty opt for college degrees to bolster their chances of getting work.. Opportunities for advancement are plentiful; many bookkeepers go on to become auditors or accountants.

You could work part-time or full-time, although longer work days are common at tax time, when audits are due and at the end of fiscal years. Work freelance or for an established company; the choice is yours.

The pay is solid

Bookkeepers get paid well, and as the above section touches on, you have the ability to control your career and how much you get paid. The median salary for bookkeepers in Australia is $36,430, with the upper 10 per cent earning in excess of $54,470 a year, according to the Australian Bureau of Labor. The bottom 10 per cent makes $22,480 or less. For higher pay, earn a bachelor’s degree and certifications, and focus on the highest-paying industries such as the postal service.

Your passions fit

When you have a passion for numbers and details, and the ability to focus, bookkeeping can be a fun career to go into. Part of your job is to prioritise certain tasks over others and to avoid multitasking. That’s right—no multitasking. You need to be able to focus on one financial situation and not get distracted. You mix your love of technology with old-fashioned ways. For example, you often use ledger sheets and receipt books alongside calculators, computers and software programs for accounting, auditing and document management. In bookkeeping, you’ll have to keep on top of technological developments, so a desire for continuing education is a must.

If you enjoy people, you could work in a bookkeeping job where you interact with a lot of folks. Conversely, if you are shy, there are plenty of jobs in which you don’t have to socialise as much. If you love getting out of the office, work in a job where you travel to various clients’ places of business. If you like the comfort of staying in an office, you’ll certainly find plenty of job opportunities that fit. You really can tailor the career to fit your personality as long as you have the fundamental aspects—an orientation toward numbers and detail—down pat.

What does it take to become a bookkeeper?

There are a lot of people wanting to get into bookkeeping right now because it’s something that you can do from home. You can certainly make a lot more money as an independent bookkeeper having your own bookkeeping business rather than working for somebody else. However, it’s not necessarily something that you can jump right into just because you decide that you’re going to be a bookkeeper. You need bookkeeper training. You need to understand the basics of bookkeeping, of accounting, and even have some tax knowledge in order to be able to serve a client properly. You also need to understand that bookkeeping isn’t just something easy that you can do without any training or experience. Bookkeeping can be difficult. Not necessarily because bookkeeping itself is difficult, but because we are working with clients whose books are usually not very clean.

In order for you to become a successful bookkeeper, not only do you need to understand and know how to do bookkeeping, but you also have to then (fairly quickly) learn how to clean up clients’ books. This is the equivalent, in some ways, of doing a surgery. Imagine that you’re a brand new doctor and suddenly you have to do a surgery. That may be something that you don’t have that much experience in. You’d need some practical training first. It’s the same with bookkeeping; you need to look at investing in bookkeeping training. This can be from your local community college, for example, or a bookkeeping online training school, or look for other ways of getting bookkeeping training.

Training is a must, but training doesn’t get you there all the way because then you need some practical experience. If you have never done any bookkeeping, then I want to encourage you to first actually get a job in bookkeeping by working for an accountant, a bookkeeper, or working at a company doing some accounting and bookkeeping tasks. You need to get some experience and to see some real-world transactions and see how a business runs.

The other thing that you need to consider is that learning bookkeeping isn’t enough. You need to understand the accounting and bookkeeping technology that you’ll be working with. If that’s QuickBooks, for example, then you need to decide if it will be QuickBooks Online (the cloud-based version), or QuickBooks Desktop (the desktop version of QuickBooks). There are different versions of each, so you have to decide then, which one you will be proficient at. Certainly QuickBooks Online is a whole lot easier to set up a virtual bookkeeping business with because it’s a cloud-based software. But, it’s not something that you can jump right into. Let’s say you know how to drive a regular car, that doesn’t mean you know how to drive a race car. QuickBooks Online is like a race car; you have to learn how to drive the race car before you can dive right in and do it.

Another thing to consider is that when you are starting a bookkeeping business, you are starting an actual business. That means that if you don’t have any knowledge of running a business, then you also need to learn and get experience in running your own business. That starts from determining the kind of entity (the legal and tax entity) that you will use to set up your business. It also involves having a plan for what your business will be or will look like in the future – having a business plan. Considering whether you will remain a solo bookkeeper or whether in the future you would add employees or contractors. Those are all things that you need to think about as you think about setting up your bookkeeping business. Keep in mind again, that it can be difficult. You have to learn the technology as well as learning how to do bookkeeping.

 

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