8 Common Misconceptions About Bookkeeping
There are a lot of common misconceptions about bookkeepers and the profession in general. It’s one of those jobs that is stereotyped in pop culture to no end. In this post, I want to run through nine of the most common misconceptions about bookkeeping and dispel each of them.
RELATED: What is Bookkeeping? — EXPLAINED
In This Article:
Bookkeeping is Just Data Entry
Although manual data entry is an important part of the job, there is so much more to it than just that.
For example, bookkeepers often have to:
- Compile reports (aka easily understandable summaries) of financial activity and trends to show managers or business owners.
- Check the company’s spending records for inefficient financial activity.
- Devise financial strategies to help clients optimize cash flow.
- Contact clients or appropriate agencies regarding payment.
Bookkeepers are All Good at Math
As long as you can do a few basic math functions like arithmetic in your head, you can be a bookkeeper. In other words, you don’t need to be a math whiz. This is especially true nowadays, with all the automated bookkeeping applications that can help you out.
Most of the skills that set great bookkeepers apart from mediocre ones have nothing at all to do with numbers, in fact. Things like forming and maintaining strong client relationships or finding ways to optimize tax spending are all about creativity and personal integrity, not figures.
Here is a list of some of the most popular accounting and bookkeeping software of 2020.
You Need an Accounting Degree to Become a Bookkeeper
Most bookkeepers don’t have accounting degrees. In fact, many of the people who graduate from our Bookkeeper Launch certification class don’t have a college degree at all! As long as they take a good Bookkeeping course and find good bookkeeping software, they can do an outstanding job and easily make more than $40,000 a year.
Bookkeepers are Best as Reviewers
Some business owners figure they may as well keep track of their own financial balances and then hire a bookkeeper before taxes are due to review the work done throughout the past year. This is one of the common misconceptions that keep bookkeepers from getting the respect they deserve!
From the moment an expense is first jotted down, entering it in the wrong place or failing to realize its future impact can lead to costly errors in the future. Unless a business owner has some serious know-how about money matters, a bookkeeper should handle the account balancing from day one.
Bookkeepers Will be Replaced by AI
As I mentioned, much of bookkeeping has nothing to do with numbers or data entry. An effective bookkeeper has the nuance and people skills required to make clients feel secure and confident about handling their money matters, and that’s something a machine will never be able to replicate.
Bookkeepers are Awkward Recluses
Most Americans are familiar with the stereotypical bookkeeper/accountant who never leaves the house and spends all day poring over dense spreadsheets and taping up the bridge of their thick horn-rimmed glasses. Like most common misconceptions and stereotypes, it’s very far from reality.
Having worked closely with thousands of bookkeepers, I can tell you that most are fun, active, creative people. The profession offers an extraordinary amount of flexibility, and the people working in the field take full advantage of that flexibility to lead full and exciting lives.
Bookkeepers are Just Low-Level Accountants
Accountants would actually be lost without bookkeepers. In essence, bookkeepers are responsible for producing accurate and workable raw data regarding a company’s spending. In other words, they produce reports that act as “primary sources” for a company’s financial activity.
Accountants then use the raw numbers the bookkeepers supplied to devise strategies and tips regarding the future financial goals of a business.
The two roles are sometimes mastered by an individual who then takes care of all a company’s financial needs, but make no mistake that they are different and both valuable in their own right.
Bookkeepers are Expensive
Small businesses, especially, are often hesitant to hire bookkeepers because they figure it will be prohibitively expensive. After all, the average full-time salary of a bookkeeper is over $41,000 per year, according to the Bureau of Labor Statistics, and that’s more than most small businesses can set aside.
The good news for businesses is that bookkeeping is adaptable and can fit any budget. Some cheap bookkeepers specialize in bookkeeping’s grunt work without having as much client management prowess. Some part-time bookkeepers charge much lower rates and handle only smaller accounts. The list of budget options goes on, and I’m sure any business will be able to find a good option to fir their financials.
Bookkeepers get an undeservedly bad rap. I hope that this list clears up some of the common misconceptions associated with bookkeepers to persuade more businesses to hire us and more people to choose bookkeeping as a career.
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