How to Be a Bookkeeper: Skills, Experience, and Certification Steps
Learn how to build bookkeeping skills, gain practical experience, and navigate certification options to start and grow a career in financial recordkeeping.
Bookkeeping helps businesses track their financial health, comply with regulations, and make informed decisions. Because companies of all sizes rely on accurate financial records, the demand for skilled bookkeepers remains steady across industries. Understanding how to enter this field can lead to stable job opportunities and pathways to self-employment, whether you are considering bookkeeping as a new career or seeking to formalize existing skills.
This guide outlines what it takes to become a bookkeeper, covering necessary knowledge, typical responsibilities, ways to build experience, and steps toward professional certification.
Foundational Knowledge
A solid grasp of fundamental concepts is necessary for anyone aspiring to become a bookkeeper. Bookkeeping involves the systematic recording of a business’s financial transactions. This requires understanding the basic accounting equation: Assets = Liabilities + Equity. This equation shows that a company’s resources (assets) are balanced by claims against those resources, either from creditors (liabilities) or owners (equity).
Modern bookkeeping relies on the double-entry system, where every transaction affects at least two accounts. A debit entry is made in one account, and a corresponding credit entry is made in another, ensuring the total debits equal the total credits for each transaction. This maintains the balance of the accounting equation and serves as a check for accuracy. Generally, debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts.
Businesses use a chart of accounts (COA) to organize transactions. The COA lists all financial accounts within the general ledger, typically categorized into assets, liabilities, equity, revenue, and expenses. Assets include items like cash and equipment. Liabilities represent obligations like loans or money owed to suppliers (accounts payable). Equity is the owners’ stake. Revenue accounts track income, while expense accounts track costs like salaries and rent. Each account usually has a unique number for organization.
Generally accepted accounting principles (GAAP) provide common standards for financial reporting in the U.S. While deep knowledge of all GAAP complexities isn’t required for bookkeepers, understanding core principles like revenue recognition, the matching principle (pairing expenses with related revenues), and the cost principle (recording assets at original cost) is helpful. GAAP aims for consistency and transparency in financial reporting, with the Financial Accounting Standards Board (FASB) setting these standards for non-governmental entities.
Familiarity with basic financial statements is also needed. These reports summarize financial activity. The balance sheet presents assets, liabilities, and equity at a specific point in time. The income statement (or profit and loss statement) shows revenues, expenses, and net income or loss over a period. Understanding these statements helps interpret a company’s financial health.
Proficiency in basic arithmetic—addition, subtraction, multiplication, division—is required, along with comfort working with percentages and decimals for tasks like calculating sales tax. Accuracy is essential. Bookkeepers must also uphold ethical responsibilities, handling sensitive financial data with integrity, objectivity, and confidentiality, often guided by codes like those from the American Institute of Certified Public Accountants (AICPA).
Core Tasks
A bookkeeper’s daily work centers on recording and organizing financial transactions. This involves entering details about sales, purchases, payments, and receipts into the general ledger, often using accounting software. Each transaction must be accurately categorized using the company’s chart of accounts.
Bookkeepers manage key aspects of cash flow through accounts payable (AP) and accounts receivable (AR). AP tasks include processing supplier invoices, verifying them, obtaining payment authorization, and making timely payments. AR involves preparing customer invoices, tracking outstanding balances, recording payments, and potentially following up on overdue accounts.
Payroll processing is another common responsibility, especially in smaller businesses. This includes calculating employee wages, accounting for deductions (taxes, insurance, retirement contributions), and ensuring timely payment. Bookkeepers handling payroll must also manage related tax obligations, such as calculating and remitting payroll taxes and preparing forms like the IRS Form 941, Employer’s Quarterly Federal Tax Return. Staying current with payroll regulations is part of this duty.
Regular checks and reconciliations maintain the accuracy of financial records. Bank reconciliation, typically done monthly, compares the company’s bank statement transactions and balance with its internal cash account records. The bookkeeper identifies and adjusts for discrepancies like outstanding checks, deposits in transit, bank fees, or errors to align the book and bank balances.
Maintaining supporting documentation for all transactions is necessary for compliance and potential audits. This involves keeping organized files of invoices, receipts, bank statements, payroll records, and asset documents. The Internal Revenue Service (IRS) generally requires businesses to keep records supporting tax returns for at least three years, and employment tax records for at least four years. While the IRS doesn’t mandate receipts for most expenses under $75 (excluding lodging), thorough documentation is standard practice. These records are used to prepare basic financial reports.
Paths to Gain Experience
Applying foundational knowledge in real-world settings is the next step. Formal education programs sometimes include internships or practicums, offering supervised work experience. These opportunities allow learners to assist with tasks like data entry, account reconciliation, or basic report preparation, bridging theory and practice. Internships provide valuable on-the-job training.
Securing an entry-level position like accounting assistant, accounts payable clerk, or accounts receivable clerk is a direct route to hands-on experience. These roles often involve specific parts of the bookkeeping cycle, such as posting transactions or managing invoices. Employers frequently provide on-the-job training focused on company procedures and software. While some prefer candidates with college coursework, many positions are accessible with a high school diploma, emphasizing attention to detail and basic math skills.1U.S. Bureau of Labor Statistics. Bookkeeping, Accounting, and Auditing Clerks: How to Become One
Volunteering offers a practical alternative for gaining experience outside traditional employment. Non-profit organizations often need help managing finances and may welcome volunteers for bookkeeping tasks. This can provide exposure to fund accounting and hands-on practice under guidance. Volunteering demonstrates initiative and commitment.
Working part-time or freelance for small businesses is another effective way to accumulate experience. Many small business owners need help with daily record-keeping but don’t require a full-time employee. Such roles allow aspiring bookkeepers to manage various tasks, potentially including recording income and expenses, reconciling bank accounts, and preparing basic financial statements, offering flexibility and exposure to the complete bookkeeping cycle. Gaining experience typically involves starting with basic tasks and progressively handling more complex responsibilities.
Earning Credentials
While bookkeeping doesn’t usually require a state license like accounting, professional credentials can demonstrate competence and commitment. Certifications offer a standardized measure of knowledge, skills, and ethics, enhancing credibility. Pursuing certification typically involves meeting experience requirements, passing an exam, and agreeing to a code of conduct.
The Certified Bookkeeper (CB) designation from the American Institute of Professional Bookkeepers (AIPB) is one prominent credential. Candidates must pass a four-part national exam covering topics like adjusting entries, payroll, depreciation, and internal controls.2American Institute of Professional Bookkeepers. The Certified Bookkeeper (CB) Designation They also need proof of at least two years of full-time bookkeeping experience (or equivalent part-time/freelance hours) and must sign the AIPB Code of Ethics.3American Institute of Professional Bookkeepers. The Certified Bookkeeper Designation Requirements (PDF)
The National Association of Certified Public Bookkeepers (NACPB) offers the Certified Public Bookkeeper (CPB) license. This pathway may require completing specific NACPB courses or equivalent coursework, though waivers are possible. Candidates generally need at least one year of professional bookkeeping experience and must pass the CPB exam and agree to the NACPB Professional Code of Conduct.4National Association of Certified Public Bookkeepers. Certified Public Bookkeeper License Requirements
Credentials demonstrating proficiency in specific accounting software are also valuable. The Intuit QuickBooks Certified User (QBCU) certification validates skills in QuickBooks Online or Desktop. Earning this requires passing an exam covering software setup, list management, transactions, and reporting. Intuit suggests around 150 hours of experience before the exam. Similarly, the Xero Advisor Certification shows expertise in Xero software, usually earned by completing online modules and passing an assessment.
Maintaining these credentials typically requires ongoing professional development through Continuing Professional Education (CPE). AIPB requires 60 CPE hours every three years for the CB designation.5U.S. Department of Defense Civilian COOL. Certified Bookkeeper (CB) Credential Details NACPB mandates 24 CPE hours annually for the CPB license. These requirements ensure certified bookkeepers stay current with evolving practices, regulations, and software, reinforcing professional standards alongside adherence to ethical codes.