What is bookkeeping? Bookkeepers are integral to businesses; making sure all the financial records are accurate and up-to-date. In this blog, we’ll break down everything you need to know about bookkeeping. We’ll cover what exactly a bookkeeper does, how much you can expect to earn in this role, the skills you’ll need, and the steps to becoming a bookkeeper. Whether you're considering a career change or just curious about the field, you'll find all the information you need right here.
Interested in learning the skills to become a bookkeeper? Enrol in an OCA online bookkeeping course.
What is Bookkeeping?
Bookkeeping involves keeping accurate records of all the financial transactions a business makes.
There are two main types of bookkeeping: single-entry and double-entry.
- Single-entry bookkeeping is like a simple cheque book register. You record each transaction once, either as an income or an expense. This method is straightforward and is often used by small businesses.
- Double-entry bookkeeping, on the other hand, is a bit more complex but provides a more complete picture of your finances. Every transaction is recorded twice: once as a debit and once as a credit. This method helps catch errors and gives a clearer view of a business’s financial health.
Read more: Why Is It Important For Businesses To Keep Accurate Books?
A bookkeeper’s key responsibilities include:
- RecorD daily financial transactions
- ManagE accounts receivable and accounts payable
- Reconcile bank statements
- Preparefinancial reports
- Ensure compliance with financial regulations
- Complete payroll
- File business tax returns
Is a Bookkeeper the Same as an Accountant?
It's easy to confuse bookkeepers and accountants since both deal with finances, but their roles are different.
Bookkeepers are the ones who keep a business’s finances organised. They:
- Record daily transactions: Keeping track of all sales, purchases, receipts, and payments.
- Manage invoices: Making sure bills are paid and the business gets paid what it’s owed.
- Reconcile bank statements: Ensuring that the business’s records match the bank statements.
- Maintain ledgers: Keeping detailed records of all financial activities.
In short, bookkeepers handle the everyday financial tasks and ensure everything is accurately recorded.
Accountants use the information gathered by bookkeepers to provide insights and advice. They:
- Analyse financial data: Understanding the business’s financial health by interpreting the records.
- Prepare financial statements: Creating balance sheets, income statements, and cash flow statements.
- Handle taxes: Making sure the business complies with tax laws and helping with tax planning and filing.
- Plan for the future: Helping businesses forecast their finances and set budgets.
- Offer financial advice: Providing guidance on financial management and investments.
So, while both roles are crucial, bookkeepers and accountants contribute in different ways to keep a business financially healthy.
Read more: How to Become an Accountant with Online Study
How Much Do Bookkeepers Earn in Australia? (2024)
If you’re considering a career in bookkeeping, one of the first things you might wonder is how much you can expect to earn. In Australia, the average salary for bookkeepers varies depending on experience and location. As of 2024:
- Entry-level bookkeepers can expect to earn around AUD 50,000 to AUD 60,000 per year.
- Mid-level bookkeepers with a few years of experience typically earn between AUD 60,000 and AUD 70,000 annually.
- Experienced bookkeepers or those in senior roles can earn upwards of AUD 70,000 to AUD 85,000 per year.
Factors Affecting a Bookkeeper’s Salary
Several factors can influence how much a bookkeeper earns:
- Experience: More experienced bookkeepers tend to earn higher salaries.
- Location: Salaries can vary by location. For instance, bookkeepers in major cities like Sydney and Melbourne often earn more than those in regional areas.
- Industry: The industry you work in can also impact your salary. Bookkeepers working in specialised industries like finance or real estate may earn higher wages than those in retail or hospitality.
- Education: Holding relevant skills or having completed a course in bookkeeping can boost your earning potential.
Bookkeeper Essential Skills
To be a great bookkeeper, you need a mix of technical know-how and personal qualities. Let’s look at the skills you’ll need:
Technical Skills
- Accounting Software: You’ll need to be good with programs like MYOB or QuickBooks. These tools help you keep track of all the financial details accurately.
- Financial Statements: Knowing how to create and read financial statements like balance sheets and income statements is key. This helps you see how well the business is doing.
- Data Entry: You must be quick and precise when entering data to keep the records straight.
- Basic Maths: You don’t need to be a maths genius, but you should be comfortable with numbers and basic calculations.
- Tax Knowledge: Understanding tax laws can be very handy, especially during tax season.
- Advanced Excel: Being skilled in Excel can help you manage data better and create detailed reports.
Workplace Skills
- Attention to Detail: Being careful and thorough is crucial. Small mistakes can lead to big problems, so having an eye for detail is important.
- Organisational Skills: You’ll handle a lot of documents and transactions, so being well-organised helps keep everything in order.
- Communication: You need to explain financial information clearly and understand others. Good communication skills, both written and verbal, are essential.
- Problem-Solving: Sometimes things won’t add up. Being good at finding and fixing problems is a valuable skill.
How to Become a Bookkeeper
If you're organised and enjoy working with numbers, a job as a bookkeeper could be a great fit for you. Here’s a step-by-step guide to gaining the skills you need to get started.
1. Take an Online Bookkeeping Course
A good place to start is by taking a bookkeeping course. Online courses can teach you the basic knowledge you’ll need, such as preparing financial reports, organising data with tools like Microsoft Excel, and understanding how to balance books.
Read more: How to Become a Bookkeeper with Online Study
2. Get a Bookkeeping Credential
While you don't need higher studies to become a bookkeeper, they can show employers that you have the necessary training and knowledge to meet industry standards.
3.Gain Practical Experience
Hands-on experience is crucial for becoming a proficient bookkeeper.
- Internships and Volunteering: Look for opportunities to gain real-world experience, whether through internships or volunteering with local businesses.
- Freelancing: Offering your services as a freelance bookkeeper can help you build your skills and gain valuable experience.
4. Stay Updated and Continue Learning
The field of bookkeeping is always evolving, so it’s important to stay current.
- Advanced Courses: As you gain experience, take advanced or specialised courses to keep your skills up-to-date, such as learning MYOB.
- Webinars and Workshops: Take part in webinars and workshops offered by professional associations to stay informed about the latest trends and best practices.
What is Bookkeeping FAQs
What skills do I need to be a bookkeeper?
To be a good bookkeeper, you need to be comfortable with numbers and detail-oriented. You'll be using accounting software like MYOB or QuickBooks, so being tech-savvy helps. You should be organised and able to keep things tidy, both in your records and in your workspace. Communication is key too, as you'll need to explain financial info clearly to others. Being a good problem solver and managing your time well are also really important.
How do I start working as a bookkeeper?
Starting as a bookkeeper is pretty straightforward. Begin with an online bookkeeping course to learn the ropes. These courses can teach you everything from balancing books to using accounting software. Once you've got the basics down, look for internships or volunteer opportunities to get some hands-on experience. Freelancing is another great way to get started.
Is bookkeeping a hard skill?
Bookkeeping is considered a technical skill because it requires specific knowledge and the ability to use specialised software. However, with the right training and practice, it’s a skill that many people can learn. It’s more about being precise, organised, and comfortable with numbers than it is about being inherently difficult.
How fast can I learn bookkeeping?
Learning bookkeeping can be pretty quick if you put in the time. With an online course, you can get a solid understanding of the basics in a few months. The more you practise, the better you'll get. Most people can be ready to start working in about six months to a year, depending on how much time they can dedicate to learning and gaining experience.
Start Your Bookkeeping Journey with Online Courses Australia
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