Viewed historically, first there were bookkeepers and then there were accountants. Once the accountant’s qualifications became professionally recognized there was a fairly inflexible gap between the two roles that became pretty much the same worldwide.
Particularly from a small business perspective the bookkeeper was the person most likely to be found in-house, keeping the basic records of the business and making sure bills got paid on time. When the owner took the year’s accumulation of records to the accountant for preparation of the annual tax returns the accountant might not even be invited to the meeting.
And of course only accountants could handle audit work, so the bookkeeper was even further distanced from the end-of-year processes that keep the accounting profession so busy. The times however are beginning to change.
The position of bookkeeper is one of the most essential roles in modern businesses of all sizes. In many smaller organizations bookkeepers are the only employees capable of handling cash, recording transactions, tracking personnel’s leave entitlements, disbursing wages, keeping track of company assets, and reconciling the company’s accounts with outside suppliers and service providers.
Now the gap between bookkeeper and accountant is narrowing with the development of qualifications for bookkeepers that recognize their expertise, experience and training. This is especially important for SMEs where the bookkeeper is often as close as the business comes to having a Chief Financial Officer on the payroll.
In the U.S. these qualifications are provided by the American Institute of Professional Bookkeepers (AIPB) and in the U.K. by the Institute of Certified Book-Keepers (ICB). Each institute functions as a body of accreditation that certifies the standards of its members through education and examinations.
Founded in 1987, the AIPB has worked to develop and maintain standards of excellence that are now recognized nationally. This year alone 3,000 candidates will be tested across the U.S. for certification.
Steve Sahlein, Co-President of the AIPB, says: “Certification tells a business owner that the bookkeeper is a true professional with a clear understanding of correct accounting practices that are so crucial for small businesses seeking investors, loans or simply tax returns.
“Even more important is the protection that Certified Bookkeepers bring to company assets because of their training in internal controls and preventing fraud by employees, customers and vendors.”
Two key factors have held back bookkeepers from recognition as fully-fledged professionals. Many bookkeepers have obtained their knowledge on the job, learning processes exclusive to only one company or situation. This has meant deficiencies or gaps in their knowledge.
The second problem has been a lack of standardization in their training and skills that made it difficult to define precisely what constituted the requirements for becoming a bookkeeper as their scope of experience and responsibilities varied widely. These problems can be overcome by preparing for certification and passing the institutes’ examinations.
Garry Carter, Chief Executive of the ICB, says: “The Institute of Certified Book-keepers exists to promote the role of the book-keeper in commerce and industry. It supports members in employment or in public practice. It recognises the book-keeper as a professional and accepts only the very highest standards. Above all membership is about finding work, winning clients and improving career prospects.
“The Institute awards grades of membership which reflect academic achievement and professional experience. We admit only the best.”
It’s not surprising that a lot of the encouragement for bookkeepers to have a standardized base of skills and knowledge is now coming from the accounting profession. There’s a worldwide shortage of accounting talent that’s impacting on the industry with no letup in the foreseeable future. Steve Sahlein explains:
“Bookkeeping has become so complex that it required standardization. In preparing for and taking the certification examinations, students learn skills that are crucial and consistent with industry expectations, and those who appreciate certified bookkeepers the most are Certified Public Accountants, who prepare the tax reports that companies must file each year.
Clearly, accountants want to work with someone who’s been tabulating and documenting books that correspond to government standards and requirements.”
Financial systems have a profound impact on a company’s success rate. It’s estimated that more than 28% of U.S. business bankruptcies are due to problems with the financial structure of the company, often the result of the owner’s failure to grasp or attend to some pretty basic principles of financial management.
Not surprisingly the complexities of modern business are also influencing the owners of small businesses to obtain accreditation as bookkeepers. Financial consultant Anita Johnson, who teaches bookkeeping certification courses for UC Davis Extension, says that many of her students are business owners, hoping to learn how to organize their balance sheets and pay their employees.
(Johnson also says that “once they see how time consuming bookkeeping is and how many rules and regulations there are, they decide that what they really need is a bookkeeper.”)
In the U.S. today more than 100 colleges and universities offer courses that prepare bookkeepers — many of whom have only a high-school education, for the AIPB certification exam. Another 150 colleges and community colleges offer similar courses on-line.
Certification is changing and improving the lives of bookkeepers who make the effort to obtain the qualifications required. Anita Green, Chief Bookkeeper in a four-person accounting department, says: “My credibility went way up with our president and vice-president as soon as I became certified. The owners now regularly seek my input on important decisions involving capital improvements, lease-purchase decisions, the timing of new asset purchases and how to treat various expenditures.”
After receiving an AA degree in accounting at a community college and working for several years as a bookkeeper, Suzy McKinnon was employed by a local accounting firm and realized that she could do a lot more for her career if she became certified. After being certified she was given accounting duties for her company’s clients as well as full charge of the bookkeeping for the company.
The demand for bookkeepers looks assured. In California alone the Employment Development Department estimates that 45,800 jobs will open in bookkeeping and related positions due to people retiring or leaving the occupation. This estimated total promises 57,470 job opportunities through 2005. It’s logical to anticipate that the highest-paying of these positions will go to bookkeepers with certification.
Unfortunately, the pace of progress isn’t universal. In April, 2004 the Australian Taxation Office convened a symposium that brought together some 50 bookkeepers, tax practitioners and association representatives to discuss just where bookkeepers fit into the country’s tax equation.
As the National Tax & Accountants’ Association reported in its journal, Voice: With an ageing population of tax agents, seemingly no end to the increasing workload and shortages of professional staff, we need answers and quickly.
Are professional bookkeepers one part of that answer? The verdict at the end of the symposium was an emphatic YES — provided they are fully accredited. What that means at this point in time, nobody really knows.
Copyright 2004, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com.
Chris’ combination of academic credentials, career experience and temperament ideally suit his calling as a business development advisor. Clients say he has a mind for business and a heart for service.