What's the difference between a Bookkeeper and an Accountant?
In short, a bookkeeper deals with the more day to day tasks involved in managing a company's financial records, whereas an accountant will generally review and analyse the associated reports, look at the books at year-end to make any adjustment entries and complete the tax return etc. Though, depending on the experience of the bookkeeper there may be a crossover in the tasks performed.
What does a Bookkeeper do?
A typical bookkeeper has a long list of tasks they might perform. Overall, it is the responsibility of the bookkeeper to accurately record all daily financial transactions which take place within a business.
The basic ledgers a bookkeeper needs to keep, either on a computer or in manual form, are: –
Sales Ledger – which holds details of all sales the business makes, the amount of money which has been received by the business from each sale and the amount of money still owing to the business from those that have bought from them (known as debtors).
Purchase Ledger – which details all the purchases made by the company and how much the business owes to people they have bought from, known as creditors.
All associated paperwork such as invoices and receipts etc. are kept carefully filed away so that, if required, they can be accessed quickly and efficiently to back up the records submitted to the HMRC (HM Revenue & Customs). It is of paramount importance for any business owner to have well managed records - these give him/her an accurate picture of their financial situation, enabling decision making, as well as planning for the future.
At the end of each financial year, these books are then checked, reconciled and filed with HMRC. This is done by either a book-keeper or an Accountant, depending on the experience and knowledge of the bookkeeper. Failure to supply complete and accurate records to HMRC can result in a penalty being enforced against that business.
Other areas a book-keeper might work on are: –
Bank Reconciliations - making sure everything balances each month is a very important task as it is key that a company keeps a close eye on what's going out and coming into their bank accounts.
Payroll - Not all bookkeepers will process the payroll for a company, it is dependent on the size of organisation they are working for. If they are processing the payroll, the bookkeeper will need to be up to date on the latest legislations and guidelines to be able to make appropriate deductions etc. to employees' wages/salaries.
Inventory - recording what a business has and where it is in terms of its stock in trade.
Reporting - producing reports such as Profit and Loss, Balance sheet etc.
If working within a larger organisation, it is typical that different members of the accounting team will concentrate on different areas.
What skills/training do you need to become a Bookkeeper?
A bookkeeper will need various skills and knowledge to be able to carry out their tasks efficiently. Ideally, to give maximum impact on your CV, you will have undertaken a recognised qualification, such as AAT, or a course or Diploma covering all aspects of bookkeeping. This will then prove to potential employers that you have the knowledge and skillset required to perform the required tasks and become a valuable member of staff.
Here at Pitman Training, we have a range of Accounting and Bookkeeping courses to suit people all levels and are also able to offer you the opportunity of gaining an AAT ‘Level 2 Certificate in Bookkeeping’. Take a look at our range of bookkeeping courses here.
Our Bookkeeping Level 2 range of courses introduces the basics of keeping accurate accounting records through to preparing financial statements. They cover part of the syllabus for the OCR and IAB Level 2 bookkeeping examination requirements so you will be well placed to go on to achieve the qualification on completion of these courses. You could also choose the option which leads onto gaining an AAT ‘Level 2 Certificate in Bookkeeping’.
AAT Endorsed Training:
- Advanced Diploma in Accounting with AAT
- Advanced Diploma in Accounting with AAT Foundation
- Foundation Diploma in Accounting with AAT
- Foundation Diploma in Bookkeeping with AAT
- Foundation Award in Bookkeeping with AAT
It would further enhance your CV if you had experience in one of the most common business accounting packages, Sage. Again, Pitman Training has a range of flexible, self-paced Sage courses available. The main one being:
As detailed above, some bookkeepers will undertake the payroll within an organisation so it is vital that you hold proven experience in this area. Our payroll courses are the ideal place to start.
Amongst the financial training, it is also essential that you hold some important "soft skills". Some areas employers may look for are:
- Good numeracy skills
- Attention to detail
- Ability to work to deadlines
- Good communication skills
- Proven experience in using spreadsheet software packages, such as Microsoft Excel, will also set you apart from other candidates.
What can you earn working as a bookkeeper?
A book-keepers salary can range between £14,000 to £20,000+.
The large salary bracket for this type of role is dependent on experience, the region you live in and the type of company you are looking to work for or if you work for yourself etc.