Why Become a Public Bookkeeper?

Why Become a Public Bookkeeper?

Bookkeepers who want to distinguish themselves from the rest in their profession can achieve a license as a certified public bookkeeper. The licensure indicates that not only does the holder have a strong academic background and experience with bookkeeping, but they have also gone above and beyond to both pass rigorous tests and then maintain their credentials through continued education and ethical work. In fact, experienced bookkeepers who don't have a college degree can still attain a license and attain proof that they are both skilled and experienced.

While a vital credential for those seeking a job with a bookkeeping or accounting firm, the license is even more indispensable for bookkeepers who work on an independent basis rather than through a firm. That is, the license itself verifies one's ability to settle the books for an individual or a small business. Furthermore, almost half of all independent bookkeepers who attain the CPB licensure are known to boost their earnings, partially because it allows them to raise their rates.

What Is a Bookkeeper?

A bookkeeper is a professional who is skilled at recording financial transactions in a ledger, often QuickBooks accounting software or something similar. Bookkeepers need to record transactions in their proper place so that accountants can later assess the figures and write financial reports. In larger organizations, bookkeepers may specialize in areas such as inventory, accounts payable, or payroll.

What Does a Bookkeeper Do?

What Does a Bookkeeper Do?

On a day-to-day basis, a bookkeeper is charged with keeping accurate records of financial transactions in an accounting software system. While some specialize in one specific aspect of a business, such as payroll, others take a more comprehensive role, especially in smaller organizations. Bookkeepers must be adept with data entry as they often need to record a large number of transactions using a 10-key pad. Once the data has been accurately recorded, bookkeepers must ensure that it is ready for the trial balance stage, in which the debits and credits are equal.

Bookkeepers are charged with recording transactions and performing simple financial calculations. They must be exceptionally accurate, so their data entry abilities must be as close to flawless as possible. Once their work is complete, it is often sent to accountants who apply financial models to it and otherwise interpret the data. Some bookkeepers are tasked with generating financial reports to present for their managers. The reports might reflect incoming revenue over time, outgoing payments, or some comparison of the two. Bookkeepers might also participate in various stages of a corporate audit, though they must do so under the supervision of licensed accountants.

Bookkeepers typically work in an office environment and, these days, all perform their primary duties using a computer. While many bookkeepers work in large organizations and may specialize in a specific department, such as inventory, it is possible to work independently for one or multiple clients on a contract basis.

Requirements to Become a Certified Public Bookkeeper

1

Degree Necessary

For those who desire a license as a certified public bookkeeper, the National Association of Certified Public Bookkeepers requires that applicants have a base of knowledge in preparation for the examination. Those with an associate or bachelor's degree should have acquired that knowledge while in school, and applicants should submit their college transcripts for review to ensure that they've completed the necessary coursework. If their college work was not adequate, or if you haven’t earned a degree but have some experience, the association provides courses that are tailored specifically for the CPB examination. Candidates should also be aware that the NACPB requires one year of experience prior to sitting for their examination.

It is not necessary to have a degree to become employed as a bookkeeper. However, the job market continues to require more and more training. Thus, it is recommended that bookkeepers achieve at least an associate-level degree in finance, accounting, or business. Those who complete a bachelor's degree are likely to have even better job prospects.

2

Subject Focus

  • Accounting Fundamentals: The exam covers accounting fundamentals such as payroll considerations, taxes, deposits, and payments. The many other topics covered by the exam include general ledger and journal entries, cash, how to analyze business transactions, T accounts, and more.
  • Accounting Principles: These test covers the generally accepted accounting principles (GAAP). These ten concepts include the principles of consistency, regularity, sincerity, prudence, periodicity, materiality, and utmost good faith.
  • Payroll: This is a special expense that includes employee salaries, expenses, and benefits packages. The test will cover a wide range of issues including payroll taxes, employee expense reimbursements, bonus structures, and severance packages, among others.
  • QuickBooks: This is a software package created by Intuit that is a standard for bookkeepers. It helps bookkeepers sort transactions and run reports that track debits and credits for a business. Test takers with strong work and academic experience will likely be familiar with this software.
3

Exams

Once candidates are approved to sit for the open-book, two-hour exam, they are invited to schedule and pay for each individual part of the examination. Each part costs $100 for NACPB members or $150 for non-members, and they may be taken at any time via the Accounting Training Unlimited's Online Test Center. Once candidates schedule their desired day and time via the online portal, they will receive an access code on the last business day prior to the scheduled testing session.

The CPB exam consists of four individual test that consist of 50 multiple choice questions and/or simulations each, or 200 total questions. Each test can be scheduled and taken separately and must be passed with a score of 75%, or 37 correct answers per test. In the event that a candidate does not pass one of the tests, they may re-take that test, given they are willing to pay another test fee. Members pay a re-test fee of $50 and non-members pay $75.

How is the Certified Public Bookkeeper Exam Scored?

How is the Certified Public Bookkeeper Exam Scored?

The CPB exam is a series of four open-book, multiple choice tests that are conducted online from the test taker's home or setting of choice. The exam is thus scored by computer. To pass, each of the four parts must be passed with a score of 75%, which works out to 37 correct answers out of 50.

Candidates have up to a year to take and pass all four parts of the exam. Students can focus on each of the four parts independently. Some take one part every 3 months so that they can focus on that part independent of the rest.

Study Resources and Preparation for the Bookkeeper Exam

Study Resources and Preparation for the Bookkeeper Exam

Prior to taking the bookkeeper examination, candidates must qualify to sit for the test. The qualifications include academic training and experience. The NACPB offers courses for bookkeepers who have not completed a college degree or whose transcript does not reflect the proper coursework. Those courses are aimed at helping students pass the exam. Additionally, the association offers practice tests, an online dictionary, videos, and other resources on their website. Check their website to find ample exam resources (https://nacpb.org/free-bookkeeper-resources/). Resources are also available through the National Bookkeepers Association (https://bookkeeperassociation.org/training/bookkeeping.cfm).

Since the examination is open-book, test takers are free to bookmark or otherwise save any resources they feel may help during the test. Others may choose to make a comprehensive cheat sheet. One method for such a learning tool is to create a document full of hyperlinked terms that direct the test-taker to a website or a definition within the document.

Believe it or not, creating a cheat sheet is a terrific way to study and integrate the material. Candidates should avoid blindly copying and pasting material, however, and should seek to fully comprehend every term and concept that is on the sheet. The sheet will thus function as a handy resource and a memory trigger more than a crutch that inhibits learning.

Bookkeepers may also seek out peers who may wish to study in groups. This may work well for individuals who work in a larger bookkeeping department or firm. Bookkeepers who are completing a degree can keep in touch with their classmates and then, once everyone has met the exam's experience requirement, they can reunite and form a study group.

1

Difficulty

The bookkeeper's examination should be considered very difficult. While it’s certainly not as difficult as the certified public accountant (CPA) exam, candidates should be sure to prepare as much as possible. However, if every aspiring certified bookkeeper studies hard and utilizes the review material available on the NACPB website, as well as the materials available through the American Institute of Professional Bookkeepers (https://aipb.org/certification-program/), they should have no problem acing this test.

Since the examination is administered as an open book test, students can create a test-taking strategy that includes well-formatted materials. When candidates create a comprehensive study sheet to access during the test, they are sure to breeze through.

2

Cost

The cost to become a Certified Bookkeeper can be as little as $400 for the examinations ($320 for NACPB members), plus a $100 application fee. That estimate assumes an application that includes a satisfactory college transcript. However, bookkeepers who do not have the appropriate college coursework under their belt will need to take courses through the NACPB. The course and examination bundle costs $1,276 for association members, but the non-member price is $1,596.

Career & Salary

1

Where Might You Work?

Bookkeepers are found working for almost every sort of organization. Larger organizations have specialized departments for specific bookkeeping functions such as accounts payable, accounts receivable, and payroll. A smaller, independent business might employ a single bookkeeper on a full-time or contract basis to handle all of their bookkeeping needs.

While many bookkeepers work in their employer's offices, freelance bookkeepers can work from home or in their own offices. Part of their day might entail collecting receipts or invoices from their clients for data entry purposes, but each client is sure to have their own needs.

2

Career Outlook

The field for bookkeepers is increasingly competitive, so it is imperative that aspiring bookkeepers complete degrees and certifications. Automation and other technological solutions have streamlined the data entry process so many bookkeeping departments are seeing a decline. Thus, the field for accounting, bookkeeping, and auditing clerks is projected to shrink by 4% in the years between 2018 and 2028. However, since many bookkeepers have little or no formal education, a degreed bookkeeper is sure to fare better in the job market. Furthermore, they may be able to leverage their experience and degree into a better position, such as that of a full accountant. Accountants and auditors are looking at a 6% employment increase in the same time frame.

In the meantime, the average salary for bookkeepers is just over $41,000. Certified professional bookkeepers are sure to fare better, and have more opportunities, than their non-certified peers.

3

Jobs

  • Full Charge Bookkeeper: Rather than overseeing one specific aspect of a company's books, such as accounts payable, full charge bookkeepers typically have a bachelor's degree and work with a full spectrum of the financial picture. Thus, these professionals handle payroll, financial statements, bank reconciliation, and more. Full charge bookkeepers with 1-4 years of experience make around $18/hour. However, pay rates vary according to individual experience, job duties, and skills.
  • Office Manager: Smaller offices may require a skilled bookkeeper to manage the daily accounting routines on top of other tasks around the office, including answering phones, and more. Salaries for these jobs vary depending on the firm, but the hourly rate is generally between $13-$25/hr.
  • Accounting Clerk: This is a great position for a bookkeeper who aspires to someday become a certified public accountant. In their day to day job, accounting clerks may manage a set of accounts for which they oversee the accounts payable/receivable. Starting pay for an accounting clerk is generally around $15/hour.
  • Payroll Clerk: Bookkeepers in this position ensure that an organization's employees are all paid the correct amount and on time. They might manage other aspects of compensation such as travel expenses, benefits packages, and bonus payments. These professionals are paid between $15 and $18/hour.

Sources and Additional Articles:

A Day in the Life - Preschool Teacher