The Five Common Myths About the Bookkeeping Profession and How Not to Fall Into the Trap of Unrealistic Expectations

The Five Common Myths About the Bookkeeping Profession and How Not to Fall Into the Trap of Unrealistic Expectations

Myth 1: It is better for a certified accountant to manage the bookkeeping department in the company.

Not true.

Accountancy and bookkeeping belong to the same family but are still different professions with significant differences.

Most accountants are not familiar with bookkeeping techniques and do not delve into the transaction level. They examine the final result at the balance sheet level and will see if the data makes sense or not. A professional bookkeeper knows how to explain the path to the result, meaning they create the data that ensures proper financial statements. In other words, accountants can predict the outcome, but bookkeepers know how to achieve it.

Regarding payroll, accountants generally know labor laws, but applying them in payroll software and ensuring the accuracy of pay slips requires deep understanding and up-to-date knowledge of labor laws, practical experience in their technical application in payroll software, and meeting reporting and form requirements of authorities. This is the responsibility of certified bookkeepers and payroll accountants.

Accountants know the list of reports that need to be submitted monthly and annually to authorities (VAT, deductions, advances, annual report 126, annual report 856), but they are usually not familiar with the techniques of preparing and submitting these reports (actions that create the data for the reports, relevant websites for reporting/transmission, file formats, etc.). Occasionally, the regulator demands additional reports, changes the schedule, or the method of submission. This has been happening more recently, mainly due to emergencies common in our country (such as the COVID-19 pandemic, Operation Swords of Iron). The ones who need to understand and implement these changes in businesses are bookkeepers and payroll accountants. For example, new forms/reports recently introduced include the new Form 100 for National Insurance, the new Form 161 that caused quite a stir, or the new VAT requirement, the “Israel Invoices Model,” where VAT assigns invoice numbers for invoices over 25,000 NIS.

Conclusion: The person who should manage the work is the one most knowledgeable and able to supervise the execution team’s activities. Therefore, the knowledge and managerial skills of bookkeepers need to be developed, and the status of chief bookkeepers should be strengthened, granting them all necessary authorities for proper team management.

Myth 2: Bookkeeping is an “easy to obtain” profession, so it is typically pursued by people who did not find their place in other finance professions that require time, effort, and money (like accountancy or business management). Bookkeeping is a gray and boring profession, and people engage in it out of necessity.

Not true (in most cases).

Why not entirely? Because in certain situations, choosing to be a bookkeeper is a worthy alternative that was not made by default. For example, new immigrants with degrees in finance like economics and business management, who obtained their education at foreign academic institutions over the years, come to Israel and need to make a living. Thus, their natural choice would be bookkeeping. Some will later study the coveted profession of accountancy or business management, while others will stay in bookkeeping and advance within it by choice.

Although obtaining a bookkeeping certificate requires six months to a year of training, it is a data-rich profession that demands intensive learning and should not be underestimated:

  • VAT and Income Tax laws
  • Labor laws
  • National Insurance laws
  • Various institutional forms
  • List of institutional reports and their submission schedule
  • Bookkeeping techniques in accounting software
  • Adapting knowledge to the reporting method of the managed company: Israeli GAAP, USGAAP, IFRS, and the company’s structure regarding equity composition, number of related companies, number of banks and credit cards, number of employees, etc.

What makes an employee professional or causes them to leave the bookkeeping profession?

  • Some start but do not connect with the profession and leave the course without obtaining a certificate.
  • People lacking integrity and conscience will not find themselves in this profession. Such individuals pose a risk of fraud in the company. Every profession dealing with money requires uncompromising integrity. The “ultimate goal” of every recruiter and professional manager is to identify a candidate with potential malicious intent and neutralize any attempt to join the company.
  • Over my career, I’ve met people with bookkeeping certificates who felt the profession was gray and unsuitable for them. They claimed the work was done under pressure, required a lot of overtime, was not adequately compensated, and was not for them. What was common among these individuals was that they did not enjoy entering the profession, the process, and the actual professional manager’s guidance in their first role. The unpleasant experience made them want to distance themselves from the profession, so the role of the professional manager in guiding new bookkeepers is critical.
  • As in many fields, the starting salary is not rewarding, but there is immense potential to reach very respectable salaries and specialize in a specific area they connect with the most.
  • Proper and accurate management fills the employee with motivation and responsibility that will greatly benefit the department. Poor management leads to employee turnover. Numerous studies show that the quality of management is the first factor in an employee’s decision to stay or leave, often more important than salary and benefits.
  • During job interviews, it is advisable not to hastily dismiss a candidate who seems attentive but lacks enthusiasm and initiative. Remember, their primary reason for being there is the desire to earn a living. It is possible and necessary to make the employee enjoy the profession, which dramatically improves their and the entire department’s performance quality. Be attentive to the employee’s needs. An employee who talks during the job interview about support and guidance in entering the role likely experienced dissatisfaction with the professional guidance of their previous direct manager. Providing them with a different experience can completely change their attitude toward the profession. Attention and personal care will turn the employee into a loyal team member in your department.

Conclusion: Bookkeeping is a profession that allows for professional and economic advancement. The idea is to provide the new employee joining the team with a smooth transition into the role and professionally support them. On the other hand, success in bookkeeping requires the employee’s investment, integrity, and responsibility. Therefore, the profession cannot be defined as a “compromise” for those in the finance field but as a complex and respectable profession pursued by many out of their free will to work and advance in it.

Myth 3: It is best if recruitment for the bookkeeping department is done by professional HR managers and recruiters in the company or a placement agency.

Not true.

Professional recruiters are indeed experts in recruiting suitable employees, but to increase the success rate of hiring a quality employee who will stay long-term, it is advisable to involve the professional manager of the bookkeeping team in the recruitment process.

To sharpen my argument even further: it is crucial for the professional manager to lead the recruitment process!

One cannot underestimate the destructive impact of employee turnover in the bookkeeping department.

The department must operate continuously like a well-oiled machine where each part depends on the other, and everyone knows what, when, and how to perform their tasks.

Each such “part” replacement leads to disruptions in the entire department, affects workflow continuity, causes delays in processing materials, and often leads to delays in report submissions.

The one who understands these implications and is responsible for preventing them is, first and foremost, the direct professional manager!

A good manager understands the department’s needs to ensure its proper and continuous functioning, knows the department’s atmosphere and energy, and can assess whether the new employee will integrate easily and naturally or if additional efforts will be needed to make the new “part” of this “mechanism” called a department an organic part of it as quickly as possible.

It is no secret that there is never a 100% match between a new hire and the job requirements. There are always experience and knowledge gaps, and only a professional manager can accurately assess whether these gaps can be bridged quickly. They will also be tasked with integrating the employee into the department and efficiently filling these gaps.

Conclusion: It is crucial and most efficient for the company to give full managerial authority to the chief bookkeepers in the recruitment of department employees.

Myth 4: The bookkeeper has sole responsibility for delays in the company’s bookkeeping because this is the result of their lack of investment in the work and lack of knowledge and ability to streamline the department’s processes.

Not true.

Although there are exceptions to every rule. There may be a bookkeeper directly responsible for bookkeeping delays, but throughout my career, I have encountered very few cases of such indifferent bookkeepers. Typically, these are people who know how to work and put in a lot of effort to “straighten out” the system and catch up on gaps, even if it means putting in extra hours at the expense of their personal time. The harsh reality is that often this is simply not enough. Overtime is not a parameter for assessing an employee’s professionalism, dedication, and responsibility. Many years of managing bookkeeping departments in companies have taught me to view overtime as a symptom of department operational disruptions.

The reasons are:

  • Staff shortages in the department
  • Imbalance in the department’s schedule due to incorrect task distribution and lack of synchronization among team members
  • Lack of knowledge or misunderstanding of the task by the employee, avoiding asking the direct manager and/or colleagues in the team
  • Departmental difficulty in interpersonal relationships: team members avoid offering help to a struggling colleague, especially a new department employee
  • An operational problem exists in the work process, making task completion difficult

All of these problems are the exclusive responsibility of the department manager. They must identify signs of lack of synchronization and balance and resolve them immediately without delay.

Regarding the second claim that the chief bookkeeper must find solutions to streamline the company’s bookkeeping processes, I want to ask you: Do you think every software engineer must be a talented startup entrepreneur with a groundbreaking technological solution?

I’m sure you know the answer.

Only someone with many years of experience improving business processes will know how to diagnose the source of the problem, identify the technological solutions available, and determine the relevant companies and individuals who can provide the solution and optimally tailor it to the business.

Finding suitable solutions by consulting relevant professionals makes the bookkeeper responsible, dedicated, and caring. Outsourcing does not diminish their professional skills.

Conclusion: The reasons for disarray in bookkeeping are not necessarily due to inadequate work by the bookkeeper. Technological and operational challenges may arise, and the chief bookkeeper should know whom to consult to achieve the optimal solution for the company.

Myth 5: The first internal bookkeeper in the company is the one who must transfer the bookkeeping from the external office to in-house management and build the bookkeeping department within the company, including all its integration, alongside ongoing, continuous work.

Not true.

There are many companies that hire the first internal bookkeeper as a single function. This bookkeeper must perform ongoing bookkeeping, sometimes even prepare payroll for company employees, and transfer the company’s bookkeeping from the external office (outsourcing) to in-house management. They are responsible for establishing the bookkeeping department in the company, integrating it with other company departments, building an internal reporting system, and setting a work schedule. In many cases, they also need to recruit and train new employees. Is there a bookkeeper so highly skilled that they can perform all these tasks simultaneously?

It turns out that many companies try to hire a “superhero” bookkeeper who can manage all fronts. The recruitment process for such an employee can take many months, during which the bookkeeping continues to be managed by an external office, which likely cannot provide the required work quality as the company grows and needs to establish an in-house bookkeeping department.

Another point to consider is that highly skilled professionals cost a lot of money. The company must commit to the senior employee with a long-term employment contract and a high salary for their professionalism and skills. The question that arises here is: does the commitment to employing such an employee in the long run align with the company’s capabilities?

Additionally, a conflict of interest arises. On one hand, the professional and dedicated employee will invest fully in setting up the department: introducing efficient work methods, recruiting and training employees, building a functioning department, and integrating it. On the other hand, after laying the foundations and building a quality department, there is a fair chance that after two to three years of intensive work, instead of enjoying the fruits of their labor, the chief bookkeeper will face an unpleasant situation where there is a need to reduce salary costs (unfortunately, this is the nature of the business world), and the company decides to replace them with a less experienced employee at a lower salary who “lands” in a functioning and organized department.

Indeed, it is an illogical situation where the better an employee performs in building the department, the more uncertainty there is about their continued employment in the company, solely due to the high costs the company incurs for their services.

This conflict between the dedicated employee and the decision-maker in the company, who must prioritize the company’s economic interest above all else, creates discomfort.

Conclusion: Save good and professional employees from distress; agree on a fair and mutually acceptable salary that can be sustained over the years. Give the employee a reasonable scope of tasks. Often, people are willing to be flexible with salary expectations in exchange for working in a pleasant and comfortable environment with reasonable hours. One way to achieve this is by separating ongoing tasks from project-based tasks in the company. A mechanism can be created whereby project-based tasks are outsourced.

In Summary: These are the main myths in the field of bookkeeping that prevent businesses from obtaining professional and efficient bookkeeping. They served as the foundation for establishing Top Level Bookkeeping.IL with the main idea of helping businesses create a perfect match between expectations and reality, eliminating outdated perceptions.

Top level bookkeeping.IL (TLB) was established to build bookkeeping systems from the ground up or transform existing bookkeeping, thereby easing the burden of project-based bookkeeping work for companies and improving ongoing management.

All to ensure you feel confident in your bookkeeping, arrive at work, and leave with a smile on your face, eager to return the next day. 🙂

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