How Much Bookkeeping Training Should You Have?

With the advent of technology and globalization, outsourcing has gotten very popular. Almost all aspects of business can now be sent somewhere else to be done by people outside of the company, even bookkeeping. If you want to find a bookkeeping job but don’t have the qualifications yet, don’t worry. You can take bookkeeping training that will help you land a bookkeeping job.

You might think accountants are the only ones that who do bookkeeping but you’d be very wrong. A degree is not a requirement, although there are companies that look for that, there are also those that only require that you have bookkeeping skills.

You can get bookkeeper training by getting an Associate Degree or a Certificate in Accounting from state colleges or universities. A certificate is sometimes enough because you’ll already have a basic knowledge of bookkeeping but if you want to move a step higher, an Associate Degree would be a good choice.

You can also take online training for bookkeeping. You just have to be very careful in choosing one that is legitimate, otherwise your money will be gone and your efforts wasted.

There’s a lot to learn about bookkeeping such as payroll, general ledger, accounts payable, accounts receivable and more. You can take some of courses you’ll need separately or you can take a general bookkeeping course.

How much training you need depends on how flexible you want your career in bookkeeping to be. The more you know, the greater the possibility that you fit most job descriptions. However, if you choose to just specialize in a certain function such as payroll, then its fine to undergo more extensive training in this. Once you’ve decided on your career path, start training so that you can start searching for a bookkeeping job.

Pros and Cons of Being an at Home Bookkeeper

If you’re thinking of starting your own bookkeeping business, you should know that there are both pros and cons of working at home. I’ll start with the cons, so we can get them out of the way:


You can get lonely:

As annoying as that co-worker who never shuts up is, having no one to talk to all day can be rather depressing and make you feel lonely. So make sure you take time out to occasionally have lunch with a friend or chit chat with your clients on the phone. It can really make a difference in how you feel.


It’s harder to stay out of the office:

If you don’t pace yourself and plan for time off, you’ll find yourself getting burned out very quickly. It’s so easy to become a workaholic when you are five steps away from the office at all times. So set your office hours and stick to them.


You can get distracted easily:

When you have to walk past that sink full of dishes or that hamper full of laundry, it’s so easy to just take five minutes and just do it. Those five minutes here and five minutes there, can really add up. Before you know it, your day is half gone. So make sure you keep yourself on task and work like you have someone looking over your shoulder at all times.



Okay, before you get too discouraged, there are some definite benefits to working at home. So here are the pros:


You don’t have to use an alarm clock:

Waking up when your body wants to and not hearing the screech of the alarm clock in your ear every morning…well what could be better than that? As long as you maintain a regular bedtime schedule, you’ll quickly find that you wake up at the same time every morning. You’ll feel more refreshed too when you wake up naturally instead of having your alarm clock blast through your deep REM sleep.


You can fit in a workout during the day:

If you have problems finding time to workout because of your job, you’ll love the convenience of being able to go to the gym when you want to. Also, because bookkeeping is a sedentary vocation, you’ll need to make sure you take the time to work out so you’ll feel better too.


You have freedom to do what you want, when you want:

How does grocery shopping during the week without the busy weekend crowd sound? Or maybe having some play time with your child on a Tuesday afternoon? Not having a boss breathing down your neck and having to account for every minute of your day, is such a blessing when you have your own bookkeeping business. You can schedule your hours as you see fit.


So those are some pros and cons to consider if you’re seriously thinking about starting a bookkeeping business. In my opinion, the pros definitely outweigh the cons.

Generally Accepted Accounting Principals - A Primer

Accountants are the keepers of the standards. They are the ones who make sure that when we look at a financial statement, we can be reasonably that it was built using sound accounting practices and that it is comparable to other audited financial statements for other companies.

That sounds like a daunting task, but never fear. The accounting professional is in business to help you through all this.

The accounting profession is self-regulated. They decide the most appropriate way to record company activity on the financial books of record. They do this through an august board of seasoned professionals, the Accounting Practices Board of the American Institute of Certified Public Accountants (AICPA). This group defines what is known as “Generally Accepted Accounting Principals” or GAAP, which all public accountants must adhere to on behalf of all their clients.

The process used to introduce new GAAP or change old GAAP is beyond the scope of this paper, but it is a lengthy process with plenty of review opportunities for all CPAs and business people.

THE PURPOSE OF GAAP

The main purpose of having GAAP is to assure consistency in accounting practices, not only within a company, but across all regulated companies. The SEC requires all publicly held companies to be audited at least annually by a Certified Public Accountant (CPA). The CPA assures the stockholders that they can count on the financial information from the company, because it is in compliance with GAAP.

By preparing all financial information according to GAAP,

• Management can depend on the records and make course corrections for their individual departments or the company as a whole for the betterment of the company.

• Investors and lenders can make sound decisions based on the financial records of the company.

• Stockholders and prospective stockholders get an accurate picture of the company’s financial health.

• Stock can be valued fairly on the market

• Deceptive, unfair and even criminal practices are minimized.

PRIMARY PRINCIPLES

The following are some of the primary principles upon which GAAP is built. This is, by no means, a complete description of GAAP, which is very detailed and takes much study to become expert at, but it shows the abiding purpose behind all that detail.

1. Historical Cost Principle: In general, the value of a company’s assets is the original cost of those assets less suitable depreciation or amortization. This keeps companies from stating their assets at market value, which is not only difficult to ascertain, but very subjective in nature. Historical cost provides the actual cost which is very objective.

2. Revenue Recognition Principal: This simply states that revenue is recognized when it is earned, which may be a different time than it is received. For example, if your company provides a service at the end of December, but you customer doesn’t pay you until January of the following year, your December revenue total will include that amount. January will not, even though that is the month in which you deposited the payment.

3. Full Disclosure Principle: Any information, whether or not strictly financial, that is relevant to the business and may have a future impact, must be disclosed. All transactions must be posted, of course. But even further, this principle provides for disclosure of contingencies. For example, if your company is being sued, the lawsuit must be analyzed for expected chance of loss. This contingency must be disclosed in a footnote of the financial statements. This is to prevent a loan officer or investor from not knowing this possibly impacting information when making decisions regarding investments in or loans to the company.

4. Matching Principle: Put simply, revenue must be matched to the expenses that helped to create it. This is why you have accruals and deferrals. The expenses associated with earning revenue for this period must also appear in this period.

GAAP ASSUMPTIONS

GAAP assumes the following:

1. Going Concern Assumption: The company or entity is a “going concern” and is not likely to end operations in the current year. It is expected to remain in business for the foreseeable future. Any exceptions to this assumption must be disclosed.

2. Economic Entity Assumption: The company is an independent entity and is separate from it’s owners.

3. Monetary Unit Assumption: The currency used to measure the entity’s financial performance is stable.

4. Periodic Reporting Assumption: Business operations are reported on a regular basis, usually annually. The fiscal year doesn’t have to be the same as the calendar year. This is usually set according to the business cycle for the particular company.

Using Generally Accepted Accounting Principles is necessary for all business entities. But you needn’t become a GAAP expert yourself. Hire a good accountant. A CPA may be necessary if your company is publicly held, or for loan or business venture requirements.

Michael Russell

Your Independent guide to Accounting

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