What Are The Basic Bookkeeping Skills?

Are you looking to become a bookkeeper? Whether you’re already in the accounting field, just starting out, or even if you’ve been considering it as an option for some time now but haven’t taken the leap yet, developing your bookkeeping skills is key.

Making sure that your finances and records are accurate and up-to-date can be a challenge for any individual or business. 

That's why having a good foundation of knowledge about basic bookkeeping principles, and best practices can give you the confidence to make sure everything is managed properly.

In this blog post, we will discuss these fundamental skills so that anyone interested in entering the world of accounting can feel equipped to get started!

Let's begin!

What is Bookkeeping?

Bookkeeping entails the tracking of all of the monetary transactions that activities in a company.

Bookkeeping refers to the practise of documenting financial information in any form, and the act of collecting this data is the first step towards entering it into an accounting system. 

Both the single-entry bookkeeping system and the double-entry bookkeeping system are considered to be common practices of bookkeeping. When it is the time of year when taxes need to be paid, having sound bookkeeping procedures in place is absolutely necessary for the success of a company.

What is a Bookkeeper?

A Bookkeeper is a person in charge of documenting and managing a company's financial activities, like transactions, expenditures, net sales, invoices, and payments. This responsibility falls under the purview of an accounting department. They will be responsible for recording financial information into general ledgers, which are the documents that are utilised to compile income statements and balance sheets.

In most businesses, the bookkeeper is the one who is in charge of supervising the first six phases of the accounting process. At the same time, the accountant is the one who is usually in charge of handling the latter two processes. There is a significant amount of similarities between the two occupations generally; nevertheless, there are some key differences that will be covered in this post.

Bookkeeping vs. Accounting

Today we are observing an inclination to integrate both of these responsibilities into one. As a result, both accounting and bookkeeping are gradually adopting aspects related to each other, which is leading to the gradual blurring of the boundary that once separate the two disciplines.

We would like to ensure that you are aware of the key differences between an accountant and a bookkeeper for the purpose of clarity.

Bookkeepers are accountable for documenting monetary operations, whereas accountants are responsible for interpreting, categorising, analysing, reporting, and summarising financial information. Bookkeepers are accountable for documenting monetary operations, although accountants are responsible for these tasks. However, when considered in the context of making decisions, the leadership of a business cannot make choices based on the information that is supplied by a bookkeeper. This is because the bookkeeper does not have all of the relevant information.

Bookkeeping, on the one hand, refers to the process of recording the regular cash operations of an organisation in the form of ordered accounts. On the other hand, it can also refer to the numerous recordkeeping methods that organisations can apply. Maintaining accurate books is an essential part of the accounting procedure for all of these considerations and more.

In contrast, accounting refers to the act of measuring, interpreting, and disseminating data regarding businesses and corporations, both financial and non-financial in nature. In addition, accounting evaluates the results of a company's business activities and relays this data to managers, investors, creditors, and government authorities.

In general, the structure of an accountant is more sophisticated than that of a lawyer. Still, the two functions share many comparable features to the collection of abilities you really have to execute in order to be successful in them.

Bookkeeper Job Description

Employers are looking for candidates with important attributes such as consistency, accuracy, and the ability to minimise mistakes when it comes to this profession. In addition, it is absolutely necessary to possess experience in accounting and to be familiar with the processes involved in using accounting software products.

In larger companies, a bookkeeper's responsibilities may include monitoring and balancing the myriad of monetary deals that take place each day. Because this is often accomplished with the support of a variety of software systems, having a strong understanding of technology is an extremely significant asset for anyone working in this field. The following are some additional talents and responsibilities that are pertinent to the position:

1. Relevant Skills and Knowledge

• A fundamental understanding of accounting
• A comprehension of the best practises in accounting
• Data entry abilities
• Extraordinary focus on the finer points
• Excel knowledge and expertise from Microsoft
• Obtain very precise results with the tasks that you do.
• Professionalism and the ability to organise oneself effectively
• Applicants must have a minimum of one year of expertise or an associate degree.
• A familiarity with accounting software such as XERO, Quickbooks, Zoho, or FreshBooks, as well as other programmes

2. Job Duties and Responsibilities

• Always make sure you have a proper record of your financial dealings.
• Keep the general ledger kept current and maintained.
• Verification and adjustment of transactions entered into the accounting system
• Keeping track of one's debits and credits
• Keep the trial balance accurate by doing periodic reconciliations of the general ledgers.
• A reconciliation of the accounts to verify the correctness of the operations
• Make use of your familiarity with the local laws in order to satisfy the reporting obligations.
• Keep an eye on any deviations from the budget that was planned.

Acquire Excellent Bookkeeping Skills For Your Career

To be successful in a job as a bookkeeper, you should work on developing the following skills:

1. Observation of details

Bookkeepers can improve their accuracy when managing the financial information of their organisation by paying careful attention to every detail. This can reduce problems or errors from occuring, which can avoid potential faults in a company's records from occuring as well. In addition, because firms frequently utilise bookkeeping records to make crucial business decisions, it is necessary for bookkeepers to provide their employers with accurate statistics.

2. Invoicing

The procedure of itemising a transaction and describing every cost that appears on a bill is referred to as invoicing. When dealing with organisations, bookkeepers are responsible for preparing invoices. 

They find it easier to access data about a purchase that occurred between buyers and sellers if they are able to understand the documentation that serves as invoices. Bookkeepers are capable of keeping an eye on the revenue coming into a company and comprehending the transactions that are being made when they are capable of creating, reading, and analysing invoices.

3. Critical thinking

When dealing with firm documents, bookkeepers must engage in problem-solving and challenge-overcoming activities using analytical reasoning. They are able to analyse the significance of their data and recognise trends, tendencies, or abnormalities in the trading activities thanks to their utilisation of analytical analysis. 

After that, they can discuss potential next steps in light of the information that was provided to them. When reconciling bank records, balancing chequebooks, transferring information, and determining the origin of inaccurate computations, bookkeepers use the ability to think critically.

4. Organisation

Bookkeepers must have excellent organisational abilities in order to properly prioritise and schedule their work. They frequently organise data for initiatives that are either short-term or long-term in duration. They are capable of quickly accessing their financial data because they have good organisational abilities, which also help them to keep their financial documents organised according to a specified method.

5. Very good communication

Bookkeepers are responsible for communicating with customers in a way that is easy to understand. They may find more success in this profession if they are capable of communicating well both face-to-face and through written statements. 

Since bookkeepers might well be responsible for the files of more than one sector, they must also be capable of communicating effectively in order to work with coworkers inside the company, negotiate deadlines, seek papers, and describe data.

6. Accounts payable

Bookkeepers look at a specific type of data called accounts payable, which provides a summary of a company's existing liabilities and short-term debts. In many cases, the capability to prioritise data and document various forms of payment systems is required in order to successfully manage accounts payable. Bookkeepers can be helped in their analysis of a company's financial performance by having a thorough knowledge of the amount of cash the business owes.

7. Numeracy

Bookkeepers can be more at ease dealing with numbers if they have a solid foundation in numeracy and fundamental mathematics. When discussing numerical information and exchanging findings with accountants or other company stakeholders, it is helpful to have this capability. In the course of their work, bookkeepers frequently examine numerical data and might be required to perform elementary mathematical operations like addition and multiplication.

8. Time management

Time management is another important ability that bookkeepers must possess as it enables them to fulfil their clients' deadlines and complete all of their tasks while still remaining inside their allotted work hours. Therefore, it is essential to have the ability to plan your calendar in order to guarantee that you will finish all of your responsibilities. This is of utmost significance due to the fact that the firm you collaborate with can hold off on making a significant choice till they acquire bookkeeping information from you.

9. Data entry

The competence to efficiently and accurately enter figures into spreadsheets and accounting software is referred to as data entry. Bookkeepers benefit from having the skills necessary to enter data into business records in an accurate and timely manner. This necessitates a high level of proficiency with computers as well as an openness and willingness to adopt new technology. Those that can type quickly are likewise capable of entering data more quickly and efficiently.

10. Spreadsheets

Spreadsheets are a common tool for recording financial information used by bookkeepers. Bookkeeping professionals may find it useful to have familiarity with the many spreadsheet programmes available. 

Spreadsheet tools give bookkeepers the possibility to create different lines for multiple data kinds, as well as multiple files for specific components like employee wages and accounts payable. You could also write equations into spreadsheets so that data is automatically calculated and so that you can better understand the specifics of business activities.

11. Transparency

Because bookkeepers frequently interact with sensitive data, it is essential for them to be upfront and truthful in all of their dealings. When collaborating with businesses, they ensure that they comply with all of the defined rules to maintain their information secure. 

As a result of the high volume of enquiries from customers, bookkeepers must be capable of conveying information concisely while still maintaining a high level of sensitivity towards customers' concerns about their privacy.

12. General ledger

Bookkeepers are able to more easily record and maintain control of a firm's sales and costs with the use of the general ledger. Therefore, one of the fundamental competencies necessary for a bookkeeper to acquire in order to achieve success is the ability to construct and maintain a ledger.

Paper ledgers and computer-based spreadsheets are just two examples of the many different types of ledgers and sub-ledgers that are available. These allow bookkeepers to view and edit the data that has been stored over the entirety of the firm's existence.

13. Discipline

It is imperative that you maintain your self-control because the organisation that you work for relies on you to aid them in maintaining their financial records. If you want to be a great bookkeeper, it is imperative that you maintain your word when you commit to completing a task by a certain day and time. 

When it comes to the preparation of financial documents, maintaining consistency enables you to keep up a solid work ethic, which in turn enables you to continuously give accurate info. Furthermore, when focusing on detailed tasks with a lot of sophisticated elements, it also allows you to concentrate on what you're doing.

14. Commitment

The management of a company's financial records is a significant job that calls for great dedication. Bookkeepers often split their time between a number of different companies, thus, they must devote their complete focus and dedication to every customer's unique files while they are dealing on those files. When you, as a bookkeeper, become aware of a concern or difficulty, you have the opportunity to demonstrate your devotion by seeking a solution and directly supervising its implementation.

15. Memory

When thinking back on previous material, bookkeepers benefit from having strong memories in their heads. If you possess an excellent memory, it might be easier for you to maintain financial data records, respond to customer enquiries, and spot any flaws in your records. When it comes to tackling issues in bookkeeping that require you to remember a precise number, having a good memory can be quite helpful.

How to Bring Out the Best in Your Bookkeeping Abilities

You can emphasise your talents as a bookkeeper in a variety of ways, including the following, on your resume, in your cover letter, and throughout the interview process:

1. Bookkeeper skills on a resume

There are a number of different sections in your resume in which you can emphasise your experience working as a bookkeeper. The first place to highlight your abilities is in the goal section of your cv, which is where you'll detail your prior expertise in the areas of finance and recordkeeping. In addition to this, you can make a list of your skills using bullet points to describe anywhere from five to ten applicable bookkeeping credentials. 

When choosing talents to add, it is beneficial to consider the phrases that the company utilised in the profile of the job. If, for example, they are searching for a person who is familiar with debit and credit and you possess this understanding, you should include those words to your list of skills.

2. Bookkeeper skills in a cover letter

The bookkeeping talents that you listed in your curriculum vitae should be expanded upon in the cover letter that you send with your application. In this section, you will have the opportunity to share specific examples of how you successfully applied professional abilities such as organisation, attention to detail, and time management. You could also elaborate on just what you've gained in previous bookkeeping employment by describing how you intend to employ your abilities in future bookkeeping jobs and describing how you intend to be using them.

3. Bookkeeper skills in an interview

Reviewing a few of the characteristics that an employer wants in a bookkeeper should be done before going in for an interview process. Then, in order to get ready for any specific questions they ask, you should try working on your mental math skills and contemplating different bookkeeping scenarios. 

Arriving on time for the interview, dressed properly, and utilising your ability to communicate verbally to predict the behaviour you would like to see in the office are all great ways to demonstrate your skills and experience.

Bottom Line About Bookkeepers

Bookkeepers are crucial to the success of any enterprise. A crucial part of the accounting process for a company is the collection and entry of information, and a bookkeeper is responsible for fulfilling this function. In addition, the recorded financial information can provide useful and actionable information when there is a solid structure in place that prevents issues such as scraping scams.