Have you ever wondered how much does a bookkeeper earn? Many people want to know, especially if they’re thinking about starting a career in bookkeeping. Bookkeeping is a key part of running any business, as it keeps track of financial records and ensures that everything is in order. However, the amount a bookkeeper earns can vary depending on many factors. Let’s dive deeper into these aspects and understand what affects their salary.
What Is the Average Salary of a Bookkeeper?
The salary of a bookkeeper largely depends on where they work and the type of company they work for. In the UK, the average annual salary for a bookkeeper ranges between £20,000 and £30,000. However, more experienced or qualified ones can earn higher amounts. As a result, those working in large firms or specialising in specific areas of bookkeeping can see salaries climbing upwards of £35,000 or more per year.
Moreover, if an individual works as a self-employed professional or runs their own bookkeeping business, the earnings can vary more significantly. In such cases, the amount they charge clients and how many clients they manage will have a direct impact on their overall income.
What Are The Factors Affecting a Bookkeeper’s Salary?
Several factors influence how much a bookkeeper can earn. These factors include education, experience, location, and industry. So, let’s look at these in more detail.
Education and Qualifications
An individual with basic bookkeeping skills might find it difficult to command high rates, especially when compared to someone with formal qualifications such as an AAT (Association of Accounting Technicians) certification. Having higher qualifications or being a member of a recognised body can lead to better job opportunities and higher salaries.
Experience
Like many professions, experience plays a key role in determining salary. The more years an individual has been in the field, the more they are likely to earn. This is because experienced ones can handle more complex accounts, have stronger relationships with clients, and are more efficient in their work. Hence, someone who has been working for over 10 years in bookkeeping is likely to earn much more than someone who has just started.
Location
Those who are working in London or other major cities tend to earn more than those in smaller towns or rural areas. This is partly because the cost of living is higher in big cities, but it is also because companies in these areas tend to have larger operations and require more skilled financial management.
Industry
Some industries pay them more than others. For example, if a professional works in the finance or real estate sectors, they might earn more than someone working in a smaller industry or a non-profit organisation. Industries with more complex financial transactions often require specialised bookkeeping skills, leading to higher pay.
Freelance vs Employment
Another factor that influences how much a bookkeeper earns is whether they are employed or self-employed. Freelance bookkeepers or those running their own businesses often have more control over how much they charge, but this comes with its own challenges, such as securing a steady stream of clients. On the other hand, employed ones have the security of a regular salary, but it may be lower compared to what they could earn freelancing.
How to Increase Your Earnings as a Bookkeeper
If you are a bookkeeper, or thinking of becoming one, and want to know how to increase your earnings, there are several strategies you can follow:
- Obtain More Qualifications: As mentioned earlier, gaining additional qualifications, such as becoming certified by a recognised accounting body, can greatly increase your earning potential.
- Gain Experience: Building up experience over time will not only make you more skilled, but it will also allow you to charge higher rates or secure higher-paying roles.
- Specialise in a Niche: Bookkeepers who specialise in a particular industry, such as legal or medical bookkeeping, are often able to charge more for their services. Specialisation means you will have more knowledge about that industry’s specific financial needs.
- Become a Freelance Bookkeeper: While freelancing requires more effort in terms of finding clients, it can be a great way to increase your earnings. Freelancers have more flexibility in setting their rates, and with enough clients, the earning potential can be much higher.
- Move to a Higher Paying Industry: If you want to maximise your earnings, consider working in industries known for higher pay, such as finance, real estate, or IT. These industries often require more advanced bookkeeping services, which means they are willing to pay more for skilled professionals.
Bookkeeping Roles and Salaries
Here’s a list of common bookkeeping roles and their average annual salaries:
- Junior Bookkeeper: £18,000 – £22,000. A junior professional typically assists more experienced professionals and handles basic bookkeeping tasks such as data entry, reconciling bank statements, and preparing invoices.
- Bookkeeper: £22,000 – £30,000. A mid-level employee will manage a range of tasks, including payroll, VAT returns, and managing ledgers. They are usually responsible for multiple accounts.
- Senior Bookkeeper: £30,000 – £40,000: Senior ones often have advanced qualifications and manage a team of professionals. They handle complex financial records, tax filings and may work closely with accountants.
- Self-employed Bookkeeper: £25,000 – £45,000+. The earnings for a self-employed professional can vary widely depending on the number of clients they work with and the rates they charge.
Conclusion
So, how much does a bookkeeper earn? The answer depends on several factors, including qualifications, experience, location, and the type of company or industry they work in. While the average salary for a bookkeeper in the UK falls between £20,000 and £30,000, there are plenty of ways to increase your earnings by gaining more experience, pursuing further education, or even becoming self-employed. Whatever path you choose, bookkeeping can be a rewarding and financially stable career.
