What Are the Skills Needed for Bookkeeping?
Before we go through the skills needed for bookkeeping, we must first determine the difference between bookkeeping and accounting. Bookkeeping and accounting are two professions that are often interchanged with each other. They appear to be the same career to most people as they both deal with financial data and transactions, and both professions require basic accounting knowledge.
In the simplest of terms, a bookkeeper is responsible for an organization’s general ledger. They are responsible for recording all of the financial transactions and post debits and credits. Whereas, an accountant is responsible for more specialized tasks like interpreting financial data, reviewing and analyzing expenditures and budgets, compiling and evaluating financial information, and assisting with business strategies.
What skills do you need to be successful in the bookkeeping field? Here are some soft skills and hard skills to keep in mind if you are planning to become a bookkeeper.
1. Math or arithmetic skills
This means that you can solve simple to complex arithmetic problems pretty quickly. Although we have calculators and bookkeeping/accounting software, it is important that a bookkeeper should still be good at solving math problems and using their innate estimating instincts to know if the generated number is reasonable. Besides, you are dealing with financial data and numbers, so being good at arithmetic will be helpful.
2. Computer Skills and bookkeeping software packages
Even though you are good at math, it is important that you know how to apply your knowledge using the latest technologies such as the computer and bookkeeping software. Most businesses use bookkeeping software to help them track numbers, reduce or eliminate human error in computations, manage business transactions, and process their accounts faster than manual processing.
Some of the bookkeeping software packages you can use are:
QuickBooks is a software for small to medium-sized enterprises. It can be used to manage the daily transactions of a business such as paying and managing bills, issuing invoices to customers, managing payroll functions, and generating reports.
Learn how to use QuickBooks effectively with the following online courses:
Xero is an accounting software with easy to use features, quite similar with QuickBooks.
It provides you full accounting functionality tools like invoicing, purchasing orders, and tracking and managing inventory. There are also features like transaction management, payroll function, online payment, and more.
Learn how to set up Xero system from scratch and how to use it efficiently with Xero Online Bookkeeping online course.
Quickfile is an accounting software for multiple sized businesses. It provides over 300 integrations of accounting features. Learn how to use QuickFile with this QuickFile Accounting Software online course.
Sage is one of the most recognized accounting software popularly used by small businesses as they offer unique solutions for specific industry needs. Learn more about how to use this accounting software with Sage Online course.
VTPlus is another bookkeeping software popularly used by smaller businesses. It is inexpensive and easy to use. VT Plus Accounting Software is an online course about how to use the VT Plus software and its popular functions.
The NCH Express accounting software is most commonly used by small businesses to document and track incoming and outgoing transactions, such as purchases, sales, payments, and receipts.
Discover more on how you can organize your bookkeeping using NCH express with this NCH Express Accounts Software online course.
The Wave accounting software is commonly used by small businesses and freelancers. It can generate reports such as sales tax reports and balance sheets. You can also link your PayPal accounts and other bank accounts.
This Wave Accounting online course will help you become proficient in using the Wave software.
3. Attention to detail
Working quickly and accurately will help you in your role as a bookkeeper. You are dealing with financial data of a company or business and one small mistake can cause bigger issues. That is why you need to ensure that you are logging each and every number accurately even down to the last cent.
Knowing how to organize and maintain financial records, as well as your time will help you enjoy working as a bookkeeper. There will be times your client or employer will set deadlines like the financial year end deadline or VAT deadline, so you need to prepare and plan ahead of time to meet those targets. Organizing financial data will also help a bookkeeper save time. This is by using storage methods to find and retrieve files quickly when you need it and by deciding what record you should keep.
5. Knowledge in accounting and bookkeeping principles
Learning the fundamentals of accounting is essential to build a foundation for bookkeeping. Therefore, you must be familiar with the following:
- General Ledger
- Financial Statements
- Balance Sheets
- Bank Deposits
- Accounts Payable
- Accounts Receivable
- Debits and Credits
- Journal Entries
- Inventory Transactions
- Management Accounting Basics
- Accrual Accounting
- Bank Reconciliation
- Deferral Transactions
6. Knowledge in payroll bookkeeping
This is not only by paying the employees of the company you are working for on time, but creating a payroll system according to the needs of the business. You should have the knowledge and skills to handle the demands of the payroll settings such as:
- Payroll Journal Entries
- Payroll Tax Calculations
- Benefits Calculation
- Reporting Payroll Taxes
- Depositing Payroll Taxes
- Wage and Salary Calculation
- Bonuses and Commissions
Bookkeeping can be a self-taught skill. The information above about a bookkeeper’s skills might sound difficult for some, but if you have the perseverance and show initiative by self learning, you will learn those skills quickly and find success in the bookkeeping field. There are a lot of online courses that can help you learn the basics in bookkeeping. You can find bookkeeping related online courses in Skill Success. Here are some of those courses: