5 Pro Tips To Learn Bookkeeping

5 Pro Tips To Learn Bookkeeping Easily.

bookkeeping Aug 22, 2016

Want to learn bookkeeping easy?  

Check out these 5 Pro tips that are guaranteed to get you there quickly and painlessly.

Accounting and Bookkeeping are big subjects with lots of material.  It doesn’t have to take years to master however. 

For the rookie who has finally decided to take a formal course, we’ve assembled some savory advice to help keep things in perspective.

 

 

1. Take some time to learn essential vocabulary

Bookkeeping is the language of business. As with learning any new language muscle memory is very important. Take some time to review and study the key definitions – specifically, the 5 accounting classifications. It’s not that hard . . .  there are only 5 of them!

By reviewing the definitions regularly and keeping them top-of-mind when working through the subject, you’ll soon understand them, usually within a few days.

In our course, FastTrack Bookkeeping, we include a desktop reference card bearing the definitions of the 5 account classifications. It’s the perfect tool to speed up the learning process and it helps reinforce what you already know.

Pro tip#1:  If you have difficulty understanding the 5 classifications, then memorize them. Practice writing them down 3 times a day for 3 days. After you’ve committed them to memory, our Pro Tip #2 will be much easier.

 

2. Practice preparing the formal financial statements.

Financial statement presentation is more about “format” than it is about anything else. Because bookkeeping is a universal language, there is only one universally correct way of preparing and presenting a formal financial statement.  “Reporting” is an essential bookkeeping function. 

Getting the format right cannot be over emphasized. For starters . . . there are only two formal financial statements.  They are the Balance Sheet (which presents financial position) and the Income Statement (which presents profit or loss). 

These statements result in the formal presentation of the accounts within each of the 5 account classifications.

Pro tip#2:  Practice preparing the financial statements from scratch using figures from the trial balance (and if you don’t know what a trial balance is, then refer to Pro tip #1).

Being able to picture where the information lies on a financial statement will make you better at preparing them and understanding how to read them.

Bookkeepers who understand how to read a financial statement are more valuable and make more money!

 

3. Learn the mechanics of double entry accounting

I’m not sorry to say this, but, don’t even bother trying to “do books” if you don’t understand double entry accounting. It’s the world-standard for keeping books, in every country, on every continent, in every language. This is the only universally accepted method of maintaining books . . . and that’s that!

If you want to be a bookkeeper, then learn and understand double-entry accounting! I’ve been teaching this subject for over 20 years. In my experience, the only students who struggle with the concept of double-entry accounting (which use the terms debit & credit) are the ones who over-think it.

At the end of the day, debit means left and credit means right . . . nothing more. These two terms are placeholders referring to spatial direction. It’s not unlike the terms port and starboard (in navigation), which refer to the “left side” and “right side” of a vessel relative to its forward navigation.

In double entry accounting, the bookkeeper will physically record dollars and cents on either the left side or right side of an account.

The fundamental rule of double entry accounting is that the left side must always equal the right side, and if they do, then the books are said to be balanced.

A good course in Bookkeeping will help keep this in perspective. Sadly, many do not.

Pro Tip#3:  Forget what you think you know about debits and credits. Remember that . . . debit means left, and credit means right. What more can I say?

 

4. Do the homework

It’s no secret that the quickest way to learn a new language is to immerse yourself in it and the culture of its people. Learning bookkeeping and accounting is no different.

By completing the homework at the end of each chapter, you are in effect, immersing yourself in the language & culture of business. As a result, you’re guaranteed to pick it up quickly. FastTrack Bookkeeping uses “variable repetition” exercises that are creative. They’ve been designed so that you apply what you’ve already learned in the previous chapter, to the material in the current chapter.

Take comfort in the fact that in Bookkeeping, there are only right or wrong answers – no grey areas.

Once your homework is completed, you can review your results with an answer key and know for certain that your work is correct. You will also know for certain where you went wrong and how to prevent the error in the future.

Pro tip#4:  Complete all homework at the end of each chapter. Review your work with the answer key.

5. Phone a friend

If you’re human like me (and you probably are . . . unless you’re a google-bot reading this), you won’t likely understand everything you read the first time around.

In the early days when I was learning bookkeeping on the job, I was confronted with many situations that I just didn’t understand. I never hesitated to phone a colleague (a former classmate, or one of many bookkeepers & accountants I had come to know). Usually, within 60 seconds, we were able to work through the most difficult and complicated bookkeeping transactions. This deepened my knowledge and understanding of Bookkeeping & Accounting.

Pro Tip#5:  Don’t hesitate to reach out for help.

If you’re taking part in a bookkeeping class, ask your instructor.

If you’re taking an online course, email the course facilitator or review their FAQ or Q&A sections for help.  

Whatever your reasons for learning accounting and bookkeeping, keeping our pro tips in mind will ensure you learn the subject quickly and effectively.

Taking a formal course, whether in a classroom or through online training, is an excellent way to master the subject.

You can learn more about FastTrack Bookkeeping here.

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