How to Start a Bookkeeping Business Step-by-Step Guide

Bookkeepers handle sensitive data for their clients, and an error on your part could be costly. Errors and Omissions insurance protects you and your assets if that happens. For as long as there have been businesses, there has been a need for bookkeeping. Having a good bookkeeper can help a business monitor its financial activity, plan its future expansion, and establish a competitive advantage. Starting a bookkeeping business can be very profitable, but you will need to do some work upfront. In this guide, we will discuss the most important things you’ll need to keep in mind along the way.

• My favorite social media platform for getting bookkeeping clients is LinkedIn®.
• Ben is a great teacher and he knows how to break down the content so that anyone can learn it.
• Many bookkeeping firms prepare financial statements that their clients take to CPAs or other tax pros to prepare a return.
• LLCs and corporations are not quite as simple and inexpensive as default structures.

Business accounting software and modern technology make it easier than ever to balance the books. A platform like FreshBooks, specifically designed for small business owners, can be transformational. Maintaining bookkeeping tasks is essential for the stability and success of small businesses. With so many moving pieces (including assets and liabilities, and income Law Firm Accounting & Bookkeeping Service Reviews and expenses), small business owners must stay on top of it all. Whether you’ve been in the accounting industry for years or you’re considering starting a bookkeeping business with no experience, there’s something for you to learn in this article. Having one that’s dedicated to business use only will help keep your personal and business finances separate.

Chapter 5 — Setup Your Technology

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals. Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

• There are a lot of popular choices, like Quickbooks, Xero, Freshbooks, and Wave Accounting.
• If not done at the time of the transaction, the bookkeeper will create and send invoices for funds that need to be collected by the company.
• It’s a fantastic piece, and it’s inspired me to get my accounting and travel planning in order.
• Many banks offer additional services that can help you maintain and scale your business operations, such as business credit cards, small business loans, and more.
• One of the fastest ways to gain credibility with potential clients is to prove that you have the knowledge necessary to do bookkeeping, payroll, and perhaps tax returns.

Your website acts as a digital brochure, and it’s an easy way to show prospective clients your offerings and your prices. You can also use your website to detail your experience, list your certifications, and share testimonials from former employers or clients. Individuals who are successful bookkeeping professionals are highly organized, can balance ledgers accurately, have an eye for detail and are excellent communicators.

Step 4: Create a Bookkeeping Business Plan

For simplicity’s sake, I will assume they will not have any accounting staff, although this might not be the situation if they have purchased a practice with staff. There are three categories of accountants that leave their job to start their own practice. Those with five to eight years’ experience; 15 to 20 years of experience and those over age 50 who lose their job for one reason or another. Accrual basis accounting records those invoices and bills even if the funds haven’t been exchanged.

• By standardizing core processes, you’ll be able to better streamline your operations and ensure quality control when delivering client accounting services (CAS).
• I have a dream to help several number of other companies having bookkeeping challeges.
• It is a comprehensive document that explains not only your services but also your market and the competitive advantage you’ll have in your business.
• The key to time management is creating an effortless bookkeeping accounting system.
• This is particularly true when a business is smaller and doesn’t have the demand or budget to justify hiring a full-time bookkeeper.

You may also consider a brochure or flyer to share both in person and online. You might have prior professional experience that can serve as a springboard to gaining new clients and serving them well. In addition to moving up into higher-level positions, remote QuickBooks Live bookkeepers may also be able to enter into the tax domain by completing Intuit training and certification for taxes.

Step 3: Brainstorm a Bookkeeping Business Name

These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order https://adprun.net/11-revenue-models-examples-tips-for-startups-to/ to open a bank account. It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Angie Nelson began working from home in 2007 when she took her future into her own hands and found a way to escape the corporate cubicle farm.

Some of these elements are done more regularly than others to ensure that the books are always up to date. Other elements are completed at certain time periods as necessary to complete a business task. Though often confused for each other, there are key differences between bookkeeping and accounting.

Back Office Expert Bookkeeper (Remote/ Year Round)

QuickBooks accounting software can help you ease into the accrual method of accounting by ensuring that your records are accurate, based on information from your credit card or payment apps. If you plan on growing your business in the future, you’ll probably want to get used to using this method. Keep in mind, single-entry bookkeeping’s simplicity doesn’t allow for GAAP conformation. This inability to conform to GAAP’s requirements may not apply to very small businesses which only need to be able to illustrate a method of meeting reporting requirements for taxes and employees. Any company that must highlight cash flow retained earnings, or any other changes in a position financially must use a double-entry accounting system.

It’s possible to offer bookkeeping services to clients in person or remotely, which may be ideal if you would prefer a work-at-home job. It takes care of the daily number crunching and data entry, but that’s ALL they do. Many businesses rely on customer relationship management (CRM) platforms to track bookkeeping clients or drop potential clients into a lead pipeline. You can use these platforms to nurture relationships with your clients. Another aspect of marketing is dialing in your brand, which goes hand in hand with the type of clients you want to bring in. Knowing the market and what makes you stand out from other competitors will naturally draw your potential client base to your bookkeeping services.

Step 2 – Get training and/or a certification

A document-sharing program will allow you to share information—such as bank statements, copies of receipts, invoices, and accounting files—with your clients no matter where you’re working. My recommendation is that you use QuickBooks Online, which we rated as the overall best small business accounting software. As discussed earlier, you can get QuickBooks Online Accountant for free when you join the QuickBooks Online ProAdvisor program, which is also free. “E-Commerce and Online Business” is an online course offered by edX, a leading online education platform. However, small business owners can now avail of numerous online resources, including free online business courses. These courses empower small business owners with the knowledge and skills necessary to navigate the complexities of running a successful enterprise.