What are basic bookkeeping skills?
Being a good bookkeeper means being able to represent an exact picture of the financial aspects of your business on paper or electronic files. You need all sorts of skills to become a great bookkeeper; soft and hard skills, and above all an interest in having an overview of the financial functioning of the business.
The hard skills you need to be a brilliant bookkeeper are, among other things, to have an understanding of numbers and an eye for detail. You will need to have a certain level of maths. You will need to learn or hone your natural talents for accurate record keeping.
The soft skills you will need to be a first class bookkeeper are to have a strong commitment to the work and to be able to obtain an overview of the company; to see the bigger picture. As the bookkeeper you will find that you are able to see trends in the flow of finances and part of your role will be to work with your findings to enable the business to grow and prosper. As well as being key to communicating the overall financial health of the business you will need to attend to the nitty gritty, the details. Of course no-one is perfect and you may make mistakes sometimes. Your role will also involve double-checking all your accounts and correcting any errors you or anyone else may have made in doing the record-keeping.
Basic bookkeeping skills are learned and used by accountants, although a bookkeeper is not an accountant. The accountant will use information compiled by the bookkeeper to create the end of year accounts. Being an effective bookkeeper also means you have to be a great communicator. Your work should be clear and logical. The accounts you keep should follow basic bookkeeping principles that are understood throughout the industry.
You will need to learn bookkeeping and accounting language. You will need to learn the definitions for phrases such as debits and credits, accounts payable and receivable, accruals and auditing as well as the Balance Sheet. You will learn to closely track the activity in the bank and link it to what is happening in the business: e.g. bank deposits and reconciliation. A bookkeeper will also need to have a good grasp of how the value of equipment changes over time (‘depreciation’). You will also have to work your way through financial statements and learn about journal entries and in some cases VAT and the way that this is managed in the accounts.
You may need to train and obtain some qualifications. There are numerous courses available; some people train in-house as they work. Others prefer to apply for their first bookkeeping role having completed a course. You may be thinking of starting your own business and as a result need to become your own bookkeeper.
These days it is essential to be computer literate and to have a grasp of current technology as so many companies now use computer programmes to keep their accounts. So this is where your hard skills learning to touch type and using computing software will be useful. Your soft skills will also be relevant as you will need to have a good overall understanding of the company in order to oversee the maintenance of the figures and to present them in a coherent and comprehensible way to third parties.
A bookkeeper needs above all great data entry skills. Accurate recording of figures and the relaying of the numbers onto the ledgers or into the computer programme is key to the job of bookkeeper.
The information should be stored safely and securely. If the data is kept on physical copies these should be stored in lockable cupboards and another hard copy should be kept off-site. Therefore keeping brilliantly well-organised records is one of the key factors in being a great bookkeeper.
If you use technology to keep your company books then you need to secure your electronic data just as well if not more so than paper copies. An encrypting programme/software should be employed to reduce or minimise the chances of your company information falling into the wrong hands.
Top Skills for Bookkeepers
Bookkeepers must master a variety of hard skills, as well as possess some soft skills. Here are some of the most important skills to highlight in your application:
Debits and credits: At the heart of the bookkeeping role is recording what a business spends (debits) and what it takes in (credits). It can be helpful to mention your familiarity with accounting software, both generally and the names of specific companies (like Quicken) in your application.
Numeracy: A good bookkeeper is comfortable with numbers. Of course, you don’t need to do mental arithmetic (calculators, spreadsheet formulas, and software are here to help), but familiarity and comfort with numbers will help you catch errors.
Invoicing: In order for the company to make money, invoices must be sent out. As well as detailing the process, it can be helpful to think through and share examples of how you’ve dealt with late payments or customer pushback on invoices.
Attention to detail: Bookkeepers must make sure that the books are reconciled and that every last bill is paid, and every single invoice is sent out and followed up on in a timely manner. Being willing to track down every tiny detail and not forget any task is a core soft skill for bookkeepers.
Organization skills
This is the number one quality you will need to succeed as a bookkeeper. You will be receiving plenty of data that you will have to organize in the short-term or long-term. People will be coming to you with multiple questions per day, as they consider you to be some sort of a living encyclopedia of information. That’s why you must have a sense of organization of things, for whenever they start to get hectic.
Attention to details
Of course that this quality is inter-connected to your sense of organization. However, we want to highlight it specifically as your attentive approach makes a huge difference. As we stated above, a company may base critical decisions upon the data you provide for them. So it is essential to try not to miss any valuable details.
Integrity and Transparency
The fact that you are considered the main source of information for most people in your workplace means that they are putting their complete faith in your abilities. That is why it is very important that you reward them with the same input that involves honesty and commitment. The data you are given may be very confidential, specifically the ones involving financial transactions. So make sure to keep them that way, and at the same time, provide a transparent approach to your co-workers when needed.
Understand Double-Entry Bookkeeping
Don’t skip this step!
Double-entry bookkeeping may not seem like the most interesting topic, but it’s vital to understand how it works. Most businesses these days use accounting software instead of physical books, but the principles are still important to grasp. We’ll keep it simple, and use examples to make everything clear.
First, what’s the purpose of double-entry bookkeeping?
The point is to give you a rounded picture of where your money is going, and to help you avoid making mistakes. Every transaction is recorded in at least two places. It makes sense, because every business transaction is an exchange of one thing for another. The double-entry system shows exactly how that exchange took place, and what the results were.
Communication skills
We have to break it to you now – you will have social interaction. Some people think that bookkeepers deal with numbers only and analytical tasks and that communication is not needed. Which is wrong! You will have to communicate with people to gather the data. In fact, you need to have excellent communication skills so that you can ask them exactly the information you need. This communication may be face-to-face or electronic; nevertheless, it is very much important.
Problem-solving skills
This is another quality that people expect bookkeepers to own. In the world of finance, problems and issues will undoubtedly be knocking on your door every once in a while. Hence, you need to possess the calmness to first, spot those issues long before others, and then solve them.
Tech-savviness
The trend of data going electronic has arrived long ago. That is why to survive this ongoing trend, you must be updated with the newest software and working tools. Your analytical skills will be required to connect many dots, and since the technology is here to help you, then why not give it a shot. By searching for new ways to make your job more efficient, you will never become outdated for the company or business you work for.
Time Management Skills
Every one of your abilities would be useless if you can’t divide your tasks properly when the timing is right. That’s why you must always have a schedule and make a list of your priorities, deadlines, or related activities that must be completed in the foreseen timeline. You will surely have many projects or people to deal with, so having the right time management skills can boost your day-to-day productivity.