What does a bookkeeper do? Tasks, skills, qualifications and what to look for

Most small business owners have a vague idea of what a bookkeeper does: something to do with receipts and spreadsheets. The reality is more structured, and understanding it helps you decide whether you need one, what to ask them to do and how to tell a good one from an average one. This guide lists what a bookkeeper actually does, week by week and month by month, what they do not do, which qualifications to look for and how to choose.

The core purpose

A bookkeeper's job is to make sure that the financial records of your business are accurate, complete and up to date, so that you always know where you stand and so that your accountant, HMRC and anyone else who needs the numbers can rely on them. They are the people who keep the ledger honest.

The day-to-day tasks

Recording transactions

The foundation of the job. A bookkeeper enters or imports every sale, purchase, payment and receipt, and codes each to the right category. With bank feeds, most of this is reviewing and categorising rather than typing. See our guide to categorising business expenses.

Reconciling accounts

Matching the books to the bank statements for every account: current, savings, credit cards, loans and payment platforms. This is the main control against errors. See how to reconcile a bank account.

Managing sales and purchase invoices

Raising customer invoices, recording supplier bills, matching payments and keeping the aged debtors and creditors lists current. Many bookkeepers also chase overdue invoices as part of a credit control service. See invoicing and credit control and late-paying customers.

Capturing receipts and evidence

Collecting receipts and invoices, attaching them to transactions and chasing missing items, so that every cost is supported. See how to keep receipts for HMRC.

Preparing VAT figures

Coding VAT correctly through the quarter, reconciling the VAT account and preparing the return figures, in line with Making Tax Digital. See our VAT-ready bookkeeping service and the VAT guide.

Payroll bookkeeping

Posting payroll journals and reconciling PAYE, National Insurance and pension liabilities, usually alongside payroll software. See payroll bookkeeping for small employers.

Handling expenses and mileage

Processing expense claims, mileage logs and director's expenses. See business mileage claims.

Preparing reports

Producing monthly profit and loss statements, balance sheets and cash reports, often with a short commentary. Some bookkeepers also build management reports and cash flow forecasts. See management reports and cash flow and cash flow forecasting.

Year-end preparation

Posting accruals and prepayments, reconciling everything to the year-end date and assembling a hand-over pack for the accountant. See the year-end bookkeeping checklist.

Keeping you compliant

Reminding you of deadlines, making sure records meet HMRC rules and preparing quarterly updates under Making Tax Digital. See Making Tax Digital bookkeeping.

What a bookkeeper does not usually do

Being clear about this avoids disappointment.

• File tax returns or statutory accounts. That is accountancy work, normally done by an accountant.
• Give tax planning advice. For example, whether to incorporate or how to structure salary and dividends.
• Represent you with HMRC. That requires specific authorisation and, in many cases, professional status.
• Provide regulated financial or legal advice.

At Bookkeeping Services we do the bookkeeping, and our parent firm Accotax, which is regulated by the ICAEW, can handle accounts, tax and HMRC correspondence if you want them. See bookkeeping vs accounting.

Skills of a good bookkeeper

• Accuracy and attention to detail. Small errors compound.
• Knowledge of UK rules. VAT, PAYE, CIS, Making Tax Digital and record retention.
• Software fluency. Xero, QuickBooks, FreeAgent and Sage, plus receipt capture tools.
• Organisation. Meeting deadlines every month, without reminders.
• Communication. Explaining numbers in plain English and asking the right questions.
• Integrity and confidentiality. They see everything about your finances.

Qualifications

Bookkeeping is not a regulated profession in the UK, so anyone can use the title. That makes qualifications and the firm behind the person especially important. Common qualifications include:

• AAT (Association of Accounting Technicians): the most widely recognised bookkeeping and accounting qualification, with levels from foundation to advanced.
• ICB (Institute of Certified Bookkeepers) and IAB (International Association of Book-keepers): professional bodies for bookkeepers.
• Accounting software certifications: such as Xero and QuickBooks advisor programmes.
• ACCA, ICAEW and other chartered qualifications: held by accountants who may supervise bookkeepers.

Look also for professional indemnity insurance, a written engagement letter and clear data protection practices.

How to choose a bookkeeper

1. Check qualifications and experience with businesses like yours.
2. Ask which software they use and whether they are comfortable with yours.
3. Understand the scope of what is and is not included.
4. Ask about pricing. Hourly, fixed or per task, and what happens if volume changes. See how much bookkeeping costs.
5. Ask about security, including how they access your accounts.
6. Check responsiveness. How quickly do they reply?
7. Ask who actually does the work, and who is accountable.
8. Look for a firm behind the individual, so that illness or holidays do not stop your books.

Do you need one?

You probably do if:

• Your bookkeeping takes more than a few hours a month
• You are behind or unsure whether your records are right
• You are VAT registered or approaching the threshold
• You employ staff
• You are approaching Making Tax Digital
• Your time is better spent earning income

If your business is tiny and simple, good software and discipline may be enough. A free bookkeeping health check is a low-risk way to find out.

How bookkeepers work with you

A typical arrangement is that you give your bookkeeper access to your bank feeds and accounting software, send receipts as they arise, and answer a short list of queries each month. They reconcile, code, prepare reports and flag anything unusual. You review a monthly summary. It is not a burden on your time, and it should become routine within a month or two.

A typical month with a bookkeeper

Here is what a month looks like in practice. In the first week, the bookkeeper reviews the previous month's bank feed transactions, categorises them and asks you about anything unclear. In the second, they match customer payments and supplier bills, update the aged debtors list and send reminders for overdue invoices. In the third, they reconcile every bank and card account and post any payroll journals. At month end they produce a profit and loss, balance sheet and a short note summarising what changed, and prepare the VAT figures if it is a quarter end. You reply to questions, send receipts as you go and review the summary. The monthly cycle runs on its own and becomes background noise within a couple of months.

Frequently asked questions

Is a bookkeeper the same as an accountant?

No. A bookkeeper records and reconciles transactions. An accountant prepares accounts and tax returns and gives advice.

Do bookkeepers need to be qualified?

Not legally, but qualifications such as AAT and a firm behind them give you confidence.

How much does a bookkeeper cost?

It varies. Our flat rate is £15 an hour, with typical monthly costs of £45 to £105 for small businesses.

Can a bookkeeper do my VAT return?

They can prepare the figures and, with your authorisation, submit through software, depending on the arrangement.

Can I try you out?

Yes. Request a free health check on our contact page or get an instant quote.