Bookkeeper – Definition: (dictionairy.com)
The work or skill of keeping account books or systematic records of money transactions (distinguished from accounting ).
What does bookkeeping mean to me?
Bookkeeping is the recording of financial transactions within a business. Transactions can include purchases, sales, receipts, and payments. Basically, any process that involves recording financial transactions is considered “bookkeeping”.
A bookkeeper is an individual who conducts the recording of the business’s day to day financial transactions, or “bookkeeping”. In many cases, the bookkeeper does not have technical knowledge of accounting and tax rules, regulations or business practice. They are not required to have or maintain educational training regarding these important factors of “accounting”.
The cash that moves in and out of a company is its life line, the blood flow of the company. A Bookkeeper is an essential team member who is responsible for monitoring, recording and reporting on the company’s blood flow. These responsibilities include cash or credit transactions and recorded in a ledger where it can later be handed off to an accountant who can create reports based on the documented transactions. Common reports created from the bookkeeper’s record keeping includes the income statement and balance sheet.
Bookkeepers live and breath in the accounting software, such as QuickBooks, that the company uses. This is just one reason why choosing a good accounting software for your company and its industry is essential.
The bookkeepers’ work is normally overseen by an accountant who can review, develop and present financial reporting based on the bookkeepers’ work.
Within the Accounting industry, the bookkeeping position has little oversight. There is no required education for an individual to become and operate as a bookkeeper. Because of this, many individuals who are aspiring to become an accountant, CPA or CMA tend to start out as a bookkeeper. Most employers will lean towards hiring bookkeepers who have a High School Degree as well as an Associate’s Degree. There is a Certification by the American Institute of Professional Bookkeepers that can be obtained, though not required. This Certificate can show a level of professionalism and competence in the field of bookkeeping.
Hiring a bookkeeper is a great way to outsource the data entry, recording and reconciling the financial transactions of your company. Understanding the purpose of a “bookkeeper” and why they are different from an “accountant” is is an important step in ensuring the capabilities of the professional you are hiring.
This publication is designed to provide information of federal tax and accounting laws and/or regulations. It is presented with the understanding that the author is not rendering legal or accounting services.
This text is not intended to address every situation that arises or provide specific, strategic tax and/or accounting planning advice. This text should not be used solely to answer tax and/or accounting questions and you should consult additional sources of information, as needed, to determine the solution to tax and/or accounting questions.
This text has been prepared with due diligence. However, the possibility of mechanical or human error does exist and the author accepts no responsibility or liability regarding this material and its use. This text is not intended or written by the practitioner to be used and cannot be used by a taxpayer or tax return preparer, for the purpose of avoiding penalties that may be imposed.