What do Bookkeepers Do? Duties & Functions of Bookkeepers

bookkeeping functions

Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets. We are looking for a skilled Bookkeeper to maintain our financial records, including purchases, sales, receipts and payments. https://www.bookstime.com/online-bookkeeping Junior accountants reach similar levels of education compared to bookkeepers, in general. The difference is that they’re 3.7% more likely to earn a Master’s Degree, and 0.0% less likely to graduate with a Doctoral Degree.

Junior accountants maintain the financial records of companies through the analysis of their general ledger accounts and balance sheets. The accountant’s post journal entries, maintain accounts receivable and payable, and update financial statements. They pay payroll every month, reconcile ledgers, and submit payroll taxes. The skills necessary for this job include analytical skills, problem-solving, information confidentiality, and proficiency in accounting software and technology.

What Do You Need to Set Up Bookkeeping for Your Business?

When most people think about the difference between bookkeeping and accounting, they are hard-pressed to nail the distinction between each process. While bookkeepers and accountants share common goals, they support your business in different stages of the financial cycle. The income statement is developed by using revenue from sales and other sources, expenses, and costs. In bookkeeping, you have to record each financial transaction in the accounting journal that falls into one of these three categories.

Bookkeeping is the practice of organizing, classifying and maintaining a business’s financial records. It involves recording transactions and storing financial documentation to manage the overall financial health of an organization. Most businesses use an electronic method for their bookkeeping, whether it’s a simple spreadsheet or more advanced, specialized software.

The journal

Bookkeepers have to understand the firm’s chart of accounts and how to use debits and credits to balance the books. A bookkeeper is responsible for recording and maintaining a company’s daily financial transactions. They also prepare reports for the managers and trial balances to assist the accountants. A bookkeeper may also help you run payroll, collect debts, generate invoices and make payments. The next, and probably the most important, step in bookkeeping is to generate financial statements. These statements are prepared by consolidating information from the entries you have recorded on a day-to-day basis.

bookkeeping functions

According to the US Bureau of Labor Statistics (BLS), most bookkeepers can learn the profession’s basics in about six months [3]. Once you become a qualified bookkeeper, you can work as a permanent employee or freelancer. Besides simply reviewing their LinkedIn or website, you could also find out more about how they operate their bookkeeping services during the interview process.

Enroll in an undergraduate degree program.

The accountant would also be the person who will help with strategic tax planning and financial forecasting. She would do a meta-analysis of the business and her knowledge will bring in aspects other than the more fundamental daily transactional business activities that are the territory of the bookkeeper. Proper bookkeeping gives companies a reliable measure of their performance. It also provides accounting vs bookkeeping information to make general strategic decisions and a benchmark for its revenue and income goals. In short, once a business is up and running, spending extra time and money on maintaining proper records is critical. Accountants typically have at least a bachelor’s degree in accounting, and many go on to become certified public accountants (CPAs) or certified management accountants (CMAs).

bookkeeping functions