What is bookkeeping and what does a bookkeeper do?
Bookkeeping is the process of a company keeping track of money coming into and out of a business. It is a discipline that ensures that transactional records are correct, up to date and comprehensive and that the financial records provide accurate information from which accounts can be prepared.
A bookkeeper is responsible for recording the day-to-day financial transactions of a company. They employ double entry accounting to ensure that debits and credits match up (‘making the books balance’). Bookkeepers keep track of transactions such as expenditure receipts, bills and sales invoices; this information is entered onto ledgers, commonly in dedicated accounting systems or spreadsheets. They also produce financial statements (profit and loss, balance sheets and cashflow) and other management reports.
Responsibilities will vary, but examples include:
- Processing costs, business expenses and money received, and recording details in bookkeeping software
- Preparing and distributing invoices and receipts to debtors and suppliers
- Generating balance sheets, income statements, and other financial reports
- Checking figures, postings and reports for accuracy
- Conducting regular reconciliations of all accounts
- Reconciling or noting and reporting any differences in the records
- Raising sales invoices and monitoring debt levels
- Paying creditor invoices and other debts in a timely manger
- Preparing information for auditors
Why are they important?
Bookkeepers ensure that the transactions that occur within a company are appropriately recorded and that all the books and records have been accurately prepared to enable the company to produce annual financial accounts. This information allows companies to maintain awareness of their current financial position and is essential to making key operating, investing and financial decisions. The financial accounts are also used by external investors and financial institutions to make investment and lending decisions
Skills needed for this role
A bookkeeper must have excellent numeracy skills as well as having a logical and analytical mind. The ability to multi-task along with strong organisational skills is also key.
Strategic Professional Options examinations linked to this role
Career opportunities presented by this role
Bookkeepers are employed in the majority of industries, including firms that provide accounting, tax preparation and payroll services. The career opportunities for professionally qualified bookkeepers are varied, as a strong bookkeeping knowledge is considered foundational for a number of other roles in the accounting profession.
High level competencies required include:
Corporate and business reporting
A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.
B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.
C. Prepares financial statements for groups of entities using appropriate technologies.
D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.
Data, digital and technology
A. Identifies strategic options to add value, using data and technology.
B. Analyses and evaluates data using appropriate technologies and tools.
C. Applies technologies to visualise data clearly and effectively.
D. Applies scepticism and ethical judgement to the use of data and data technology.
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Careers in finance
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