Did you know that here are over 29 million small businesses in the U.S., according to the Small Business Administration Office of Advocacy? Small businesses make up 99.7 percent of all U.S. employer firms and almost all of the small businesses need a bookkeeper. Keeping accurate financial records is important to the success of any small business, and it is important for the bookkeeper to have advanced bookkeeping skills, computerized bookkeeping skills, basic office skills, knowledge of Microsoft Office, business math and English fundamentals.
Advanced Bookkeeping Skills
Small business bookkeeping involves credits, debits, journaling, general ledger, adjustments, closing entries and financial statements. It also includes accounting for sales, purchases, payables, cash receipts, payroll, accruals and closing procedures.
Credits – entry that either increases a liability or equity account or decreases an asset or expense account.
Debits – entry that either increases an asset or expense account or decreases a liability or equity account.
Journaling – the logging of a transaction into a journal entry in chronological order.
General Ledger – a record that keeps accounting transactions by account.
Adjustments – a transaction that has not yet been included in the accounting records.
Closing Entries – entries made at the end of an accounting period to reset all temporary accounts to zero and transfer their balances to permanent accounts.
Financial Statements – records that outline the financial activities of a small business. The financial statements a small business bookkeeper may encounter include income statements, balance sheets and cash flow statement.
- Income Statements – provides an overview of revenues, expenses, net income and earnings per share.
- Balance Sheet – provides an overview of assets, liabilities and stockholder’s equity. It is generally completed at the end of the fiscal year.
- Cash Flow Statement – merges the balance sheet and the income statement. It shows how changes in balance sheet accounts and income affect cash while breaking the analysis down into operating, investing and financing activities.
Computerized Bookkeeping Skills
Computerized bookkeeping systems are software program that allow a small business bookkeeper to set up income and expense accounts. These software programs can also be used to manage bank accounts, pay bills and prepare budgets. Knowledge of software applications including QuickBooks and Peachtree are important to master as they are used during the course of small business bookkeeping.
QuickBooks – a small business bookkeeping software solution for the management of payroll, inventory, sales and other small business needs. QuickBooks can monitor expenses, create invoices, create reports, track change orders, track job status, and manage inventory, customers, vendors and employees.
Peachtree Bookkeeping Software – a bookkeeping application for small to medium-sized businesses that allows the bookkeeper to automate and manage accounting tasks including reconciling accounts payable and receivables. It can also help the bookkeeper create financial statements, check invoices, track payroll and integrate scanned documents.
Basic Office Skills
Office skills that a small business bookkeeper will perform include keyboarding, answering telephones, word processing, operation of office machinery and filing. During the course of completing basic office tasks, the small business bookkeeper will need to stay detail oriented, use organization skills, master communication skills and provide excellent customer service with managers and colleagues at the small business.
A small business bookkeeper must be proficient in Microsoft Office including Word, Excel, PowerPoint and Access.
Microsoft Word – used for word processing and document development.
Microsoft Excel – used to develop worksheets, change appearances, incorporate formulas, implement advanced printing, graphics and links.
Microsoft PowerPoint – used to develop, customize and deliver a presentation.
Microsoft Access – used to build a database, obtain information, print reports and view information.
A certain amount of math is required to be a small business bookkeeper. They must be aware of addition, subtraction, multiplication and division. Algebra is used in bookkeeping for equations, functions, graphing, liner and quadratic equations. However, much of the math and equation work is managed within Microsoft Excel or automated by accounting software. A small business bookkeeper doesn’t have to be a math whiz.
Proficiency in English is required to be a small business bookkeeper. Business English involves basic sentence fundamentals, punctuation, mechanics and grammar. Bookkeeping will also come with a specific set of context, vocabulary, abbreviations and grammatical structure.
Interested in joining a small business as a bookkeeper? Want to learn more about an accounting diploma program? The Accounting Diploma Program is designed to prepare college graduates to seek entry-level positions in the accounting and bookkeeping fields in 18 months with day classes and 24 months with evening classes. The college graduate may work as an accounts receivable or accounts payable clerk, bookkeeper, payroll clerk, accounting assistant or inventory control clerk.
Contact us to learn more about how to become a small business bookkeeper.