Bookkeepers are responsible for maintaining an organisation’s essential accounting records, known as ledgers. As part of their daily routine, transactions such as income and expenses need to be recorded and then posted to the appropriate accounts.
Due to bookkeeping’s broad and varied nature, the job description should highlight the importance of excellent time management and organisational skills.
This role can serve as a stepping stone to more senior or specialised accounting positions as it provides exposure to many different parts of the accounting function.
Let’s get straight to the point
Bookkeepers are essential in maintaining an organisation’s financial health by managing financial activities such as income, expenses, invoices, and payments.
Their duties include entering financial transactions into accounting systems, tracking expenditures, ensuring timely invoicing and payments, handling payroll, reconciling banking information, preparing BAS and compliance documents, and generating financial reports.
Bookkeepers must be meticulous, organised, and proficient in accounting software. Typically holding a Certificate IV in Accounting and Bookkeeping, they often collaborate with accountants and contribute to business strategy and financial planning.
Their role is crucial for accurate financial records, compliance, and effective decision-making, supporting businesses across various industries.
What is a Bookkeeper?
A bookkeeper records and manages a company’s financial activities, such as purchases, expenses, sales revenue, invoices, and payments.
This responsibility falls under the scope of an accounting department. The bookkeeper enters the company’s financial data into the general ledgers, which are then used to produce the balance sheet and income statement.
In most businesses, the bookkeeper supervises the first six stages of the accounting cycle, while the accountant handles the latter two. Despite many similarities between the two careers, this article will explore key differences further.
What Does a Bookkeeper Do?
Documenting and processing financial transactions and producing statements are all vital services that a bookkeeper provides to firms.
Some bookkeepers manage the general ledger, a record of all financial transactions within an organisation. Others work as accounting clerks and handle various tasks as a team effort.
Bookkeepers check receipts, prepare bank deposits, send payments, and monitor overdue accounts. They also compile and submit business activity statements (BAS). A bookkeeper can immediately contribute to your business’s success in several ways.
1. Data Entry
Your bookkeeper will manage all your financial transactions, accurately entering them into the system and assigning them to the appropriate accounts. They will generate weekly or monthly reports that provide helpful insights into your business’s performance.
2. Expense Tracking
Your bookkeeper will record and compare all business expenditures to purchase orders and delivery confirmations. They will also enter credit card and petty cash transactions into your accounting system, track spending, and identify potential wasteful spending.
3. Invoicing and Receipts Management
Collecting money owed by customers is essential for cash flow. A competent bookkeeper will ensure invoices are sent out on time, track overdue payments, and manage all incoming cash. This function can determine a small business’s success or failure.
4. Payroll Processing
If you have employees, handling payroll can be time-consuming. Your bookkeeper will manage timesheets, calculate payroll tax and superannuation, and maintain proper employee records, ensuring payroll is processed correctly and on time.
5. Banking
Most internet accounting software solutions link directly to corporate bank accounts. Your bookkeeper can download banking information into your accounting system to record payments and receipts, ensuring all financial dealings are properly recorded and reconciled with your accounting software.
6. Compliance
Your bookkeeper must be a registered BAS Agent, which means they can produce your BAS according to ATO rules. They will also prepare documents and payments related to payroll taxes and superannuation and handle other financial reporting needs.
7. Financial Reporting
Your bookkeeper will provide regular financial reports, such as profit and loss statements, balance sheets, budgets, and cash flow forecasts. These reports will help you optimise your company’s financial performance, identifying areas for improvement and opportunities for growth.
Job Description
Bookkeepers record all incoming and outgoing transactions involving money, property, and other financial assets. The most essential duties include meticulously recording and examining all financial information.
This role requires attention to detail and precision in collecting numerical data. High moral standards and the protection of customer financial information privacy are also crucial.
Most bookkeepers use computers to manage financial information, such as payroll. This often requires proficiency in databases, spreadsheets, or other specialised computer tools.
Bookkeepers also write or print reports on financial transactions, make bank deposits, track purchasing, submit bills for accounts receivable, and prepare tax files for authorities.
Bookkeeping Duties
Bookkeepers provide precise and up-to-date financial information regarding an organisation, always monitoring the company’s financial health.
Their findings assist owners and managers in decision-making, and some bookkeepers formulate business strategies. They may collaborate with accountants on projects like compiling annual financial reports and tax returns.
The fundamental aspects of bookkeeping for a small firm are data entry and bank reconciliation. Without these, other bookkeeping tasks cannot be completed. Here are the core, additional, and advanced responsibilities of a bookkeeper:
1. Core Duties
- Data Entry: Monitoring financial transactions and ensuring books are accurate.
- Bank Reconciliation: Ensuring books match source documents and bank statements.
- Monthly Reports: Providing a summary of the company’s current financial state.
- Additional Duties
- Accounts Receivable and Credit Control: Creating, sending invoices, and following up on payments.
- Accounts Payable: Ensuring supplier invoices are paid on time and accurately.
- Payroll: Calculating wages and relevant deductions.
2. Advanced Duties
- Tax Filing: Preparing tax returns and other documents.
- End-of-Year Reporting: Developing financial plans and projections.
- Business Strategy: Conducting analysis and implementing software solutions and internal controls to improve efficiency.
Education Requirements
Most businesses prefer to hire bookkeepers with post-secondary education in math and basic accounting. However, some may hire those with only a high school education who can gain on-the-job training.
Certification as a bookkeeper typically requires at least two years of experience and passing an exam by the Institute of Certified Bookkeepers.
How to Become a Bookkeeper
To become a professional bookkeeper, you must complete the necessary training and certification. Check local government requirements to start a bookkeeping firm, especially if you plan to provide BAS and GST services.
Bookkeepers maintain financial records, monitor transactions, update statements, and verify accuracy. They also produce financial statements and reports for management and handle purchasing, payroll, invoicing, and customer dealings.
1. Steps to Become a Bookkeeper
- Finish Your Certificate Programme: Complete a bookkeeping or accounting course, such as a Certificate IV in Accounting and Bookkeeping.
- Get Work Experience: Apply for bookkeeping jobs to gain experience, especially BAS-related tasks.
- Become a BAS Agent: Apply to the Tax Practitioners Board to become a registered BAS Agent after gaining the necessary experience.
- Purchase Insurance: Obtain Professional Indemnity Insurance to protect against liability for financial losses due to errors or negligence.
2. Skills for Success
Successful bookkeepers are thorough, careful, and detail-oriented. They must also have analytical thinking, problem-solving skills, and an affinity for numbers.
Proficiency in computers, especially spreadsheets and databases, is crucial, as most accounting work is digital. Patience, diligence, and a commitment to accuracy are also important.
Industry and Job Growth
Bookkeepers are employed across various industries, including accounting, finance, retail, healthcare, and insurance.
Some work as freelancers or sole proprietors. The demand for bookkeepers is expected to remain steady, with new positions created as people retire or move to other careers in accounting.
Conclusion
Bookkeepers are crucial to any enterprise’s success. They ensure accurate financial records and compliance with regulations, and they provide valuable insights and support to help businesses thrive.
Frequently Asked Questions
What Software Do Bookkeepers In Australia Typically Use?
Common accounting software used by Australian bookkeepers includes MYOB, Xero, and QuickBooks, all of which support Australian tax compliance requirements.
Do Bookkeepers Provide Financial Advice?
No, bookkeepers generally do not provide financial advice. Their role is to maintain accurate records and provide data to help business owners or accountants make informed decisions.
Are Bookkeepers Required To Be Certified In Australia?
While formal certification is not mandatory, many Australian bookkeepers pursue qualifications like a Certificate IV in Bookkeeping and Accounting to enhance their credibility. BAS agents must be registered with the Tax Practitioners Board (TPB).
How Does A Bookkeeper Support Small Businesses?
Bookkeepers help small businesses by managing daily financial tasks, ensuring compliance with tax laws, reducing errors, and freeing up time for business owners to focus on growth.
How Is A Bookkeeper Different From An Accountant?
A bookkeeper focuses on daily financial record-keeping, while an accountant provides strategic financial analysis, prepares tax returns, and advises on financial planning.
