Last updated on January 8th, 2024 at 11:57 am
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Are you thinking of how to start a bookkeeping business?
If you have been thinking of starting a bookkeeping business but you’re not sure what steps to take, then this guide is for you.
Here we’ll go over the steps you should be taking to start a bookkeeping business.
Bookkeeping is the recording of every transaction of a business in a detailed way. This includes tracking the money that goes into the business and out of the business.
Bookkeeping skills will always be in high demand because bookkeepers are needed in almost every industry.
Getting started with a bookkeeping business can be overwhelming if you are not sure about the first couple of steps to take.
You’ll need to know where to get training, certifications, and what software to use to start your bookkeeping business the right way.
What Does A Bookkeeper Do?
A bookkeeper monitors the finances of a business and makes sure they are accurate, up-to-date, and easy to review.
The work of bookkeepers is an important part of how successful businesses work.
Bookkeepers can work for large companies, for small businesses, or as freelance bookkeepers.
What a Bookkeeper does may vary depending on the business and these may include:
- Collect and organize financial records.
- Record transactions using spreadsheets and accounting software.
- Reconcile financial statements.
- Generate invoices and receive payments from customers.
- Keep track of cash flow.
- Create balance sheets and income statements.
Cost Of Starting A Bookkeeping Business
The cost of starting a bookkeeping business is relatively low, mostly if you work from home.
In most cases, you could start a bookkeeping business for only a couple hundred dollars.
The most important things you will need to start a bookkeeping business are an LLC and A Business License.
Some of the additional things you might want to get when you are getting started may include;
QuickBooks. I recommend using the Quickbooks Online account version and it’s free for you as a bookkeeper.
As you start getting clients, you or your client will have to pay a monthly fee.
Certification/ Training. Training may vary depending on what you are looking for. You can improve your skills by taking a bookkeeping course. There are a lot of free bookkeeping resources online and Quickbooks also has a free course online.
If you are willing to invest in more comprehensive training, you can check out the bookkeeper launch, it can be a great benefit to you in the long run.
Laptop. If you don’t already have a computer then you need to get one, it doesn’t have to be the most expensive but it’s essential when starting a bookkeeping business.
Website. A website is not your number one priority but, I do recommend creating a website for your bookkeeping business.
Having a website will make your business look more professional. You can create your website using WordPress.
You can also get an affordable domain name and Webhosting for your website on providers such as Namecheap
Using platforms such as WIX website builder or Squarespace is also a great and easy way to get your business up and running.
Necessary Skills When Starting A Bookkeeping Business
There are essential skills that you need for you to become a successful bookkeeper.
Tech skills
These are important when it comes to bookkeeping, especially as a virtual bookkeeper.
When it comes to tech skills, you don’t have to be a computer geek but, you do need to be familiar with QuickBooks of computers.
It’s also important to understand things like Google Docs or video conferencing.
You need to be willing to learn new things because there are so many things to know and learn.
You’ll need to learn things like setting up your business website.
There is a need to have a good understanding when it comes to technology.
Learning Skills
As a bookkeeper, you’ll need to continually learn new things to keep up with the ever-changing industry.
There are times when you might even need to take a few classes to polish up your skills.
You might get a client who is in an industry or business you don’t understand, so you’ll need to learn new skills to do your job effectively.
Working as a bookkeeper means working with numbers and you must be comfortable and familiar with numbers and have a good understanding of them.
Good Communication Skills
As a bookkeeper, you need to have good communication skills because you’ll have a lot of communication to do with your clients.
As a bookkeeper, you will need to market yourself and that requires good communication skills.
Detail Oriented
You need to be detail-oriented as a bookkeeper because you’ll be handling people’s finances.
Your clients count on you to make sure everything is going in the right places.
It’s always important to slow down and constantly check every little detail so that you don’t miss anything.
As a bookkeeper, it’s possible sometimes things could go wrong, and you need to make sure to catch those mistakes and fix them.
Good Organization Skills
A bookkeeper needs to be someone who is super organized so that you don’t end up mixing up your clients’ information.
As a bookkeeping business, you’ll be working with many things that need to be kept organized, and doing so will make your business seem reliable.
You’ll have multiple clients in different stages of their business with different types of businesses and you’ll handle documents from different clients.
Accounting Software For Your Bookkeeping Business
There are many bookkeeping and accounting software tools available on the market and leveraging accounting software is one of the best ways to help grow your business.
When it comes to a Bookkeeping business, finding and Implementing the right bookkeeping or accounting software is necessary for your business goals and objectives.
Accounting or Bookkeeping Software allows you to record day-to-day business transactions for a business in a way that is easy to understand.
This software helps to facilitate the keeping of records for a business. It’s helpful to understand and know more about different accounting software because your clients might have a preference when it comes to accounting software.
Some of the most popular accounting software include Quickbooks, FreshBooks, Xero, Accounting Coach, and Zoho Books.
10 Steps On How To Start A Bookkeeping Business
You can easily start a successful bookkeeping business by following these steps.
Step 1 Research
Before setting up any kind of business, it’s important to do your research so you’re clear about the path you want to follow and the goals you’d like to achieve.
Doing your research about bookkeeping is essential, this will help you be sure if bookkeeping is something you want to do and it also helps you understand more about the business, and only then will you be able to make a business plan.
It’s also essential to fully understand what businesses are looking for when it comes to bookkeeping services.
There are many things to consider when researching how to start a bookkeeping business.
You can start your research by finding out how other bookkeeping businesses handle their businesses, how much they charge, what kind of services they provide, what they are doing right, and what they are not.
In addition to knowing about your competitors, it’s important to know and understand what clients are looking for when it comes to bookkeeping.
Step 2 Get Certification
There are many resources available that can help guide you to becoming a successful bookkeeper.
I can’t stress this enough, it’s essential to get some type of education or course to understand the fundamentals of bookkeeping.
This is a must if you want to succeed in your bookkeeping business and develop a detailed understanding of bookkeeping.
You can sign up for QuickBooks Online Accountant. I highly recommend this to people who are interested in bookkeeping.
This will help you get a feel or familiarize yourself with the bookkeeping industry.
It has many helpful resources and the best thing is that it has a free bookkeeper certification in there.
You cannot be a bookkeeper and not learn the basics or fundamentals of bookkeeping.
There are many resources to choose from including QuickBooks Online, QuickBooks Desktop, Xero, Wave, and many more.
You’ll have to pick and choose the one you’re going to offer your services on.
Step 3 Make A Business Plan
After doing your business research, write down your business plan and what you want to achieve with your bookkeeping business.
There are different things to consider when it comes to how you want to structure your bookkeeping business and these may include;
- Do you intend to do it as a full-time or as a side job?
- Decide if your bookkeeping business will be specializing in small businesses or corporations.
- Specify the services you’ll offer.
- You need to know how many clients you want to start with.
- What are the Startup costs for your business?
- Do you have a specific business niche you want to work with?
- Decide how you will market your business.
- Decide on the cost of your services.
Step 4 Choose A Business Name
When naming your bookkeeping business, choose a name that sounds professional, easy to spell, and search engine friendly, and it must clearly state or describe what you do.
Step 5 Register Your Business
Once you’ve chosen a business name, you’ll need to register your business.
Requirements for registering a business depend on the place in which your business will be registered, the type of business, and its structure.
Rules and regulations for whether your business is an LLC, sole proprietorship, partnership, or corporation also apply and these differ according to the State in which your business will be registered.
Step 6 Get A Business License For Your Bookkeeping Business
Before you start running your own bookkeeping business, it’s essential to fully know and understand the type of Practice Licence you need and comply with its requirements.
It’s important to get assistance when it comes to the legal stuff of your bookkeeping business, this helps to familiarize yourself with different business laws and regulations and you can get assistance from an account or a lawyer.
Make sure to verify with your City to make sure there are no additional requirements like certifications, permits, or licenses needed.
Step 7 Apply For Employer Identification Number
An EIN is free and can be done through the IRS website.
This is going to be your employer identification number, this is like a social security number for your business.
This way you don’t have to give out your social security number and this is the way your business is going to be identified.
You’ll also need this for your business identification purposes and tax returns.
Step 8 Get Insurance
Insurance is essential when you are thinking of starting any type of business.
This is a requirement if you want to start your bookkeeping business the right way.
Getting insurance for your bookkeeping business protects you and your financial interests.
Insurance protects you when mistakes happen or when clients make any claims against your business.
Step 9 Open A Business Bank Account
It’s important to start thinking about the future of your business finances. You can follow Profit First which is a good resource on how to handle your profits and finances.
Having a bank account for your bookkeeping business helps your business appear professional and keeps your personal and business finances separate.
Step 10 Market Your Bookkeeping Business
Getting your first clients can happen quickly or slowly for others. It’s important to market your business to reach potential clients.
It’s possible to find clients quickly because lots of people need help with their business finances, but sometimes they just don’t know where to look.
You can start by announcing that you have a bookkeeping business to your family and friends and ask for referrals.
Another way of marketing your bookkeeping business is by joining your local Facebook community groups where people talk about the kind of businesses or services they offer.
Create social media accounts for your bookkeeping business and join channels where you can find potential clients.
Hopefully, you’ll be able to find clients without too much trouble.
Conclusion
Starting a bookkeeping business can be rewarding because there’s always a demand for bookkeeping skills and the start-up cost is fairly low.
Running a successful bookkeeping business requires maintaining a good relationship with your clients and keeping up with business trends and accounting software trends.
Many business owners are looking for bookkeeping services and your bookkeeping business might just be the answer.
The good thing about bookkeeping is that it’s flexible and it can also be done as a side job.
You can also make money and gain some experience as a bookkeeper by offering your services on platforms like Fivver, Upwork, and Freelancer.
You can also try other online work-from-home jobs.
