Your Guide to Starting a Bookkeeping Business: Is it for You?

starting a bookkeeping business

Bookkeeping appears in the top 25 on the list of best business jobs available. Since bookkeeping involves considerable time and attention to detail, many businesses look to outsource the tasks involved.

While many bookkeepers work for other companies, there’s potential to freelance with this career option. Does the idea of owning your own business sound exciting to you? With the right training, skills, and a plan you can take the steps for starting a bookkeeping business.

A bookkeeping business needs a good plan of action though. Before you dive in, make sure you know what you’re getting into.

What is Bookkeeping?

Bookkeepers take care of the financial side of a business. The services you provide depend on your specialization, but the basic services include:

  • Balancing accounts
  • Tracking and managing accounts receivable
  • Tracking and managing accounts payable
  • General tax prep support
  • Payroll

Some human resources support, such as tracking sick and vacation pay

Balancing accounts requires that you understand credits and debits, and the transactions required to have the accurate beginning and ending balances to each account. Another important factor for bookkeepers is to understand invoicing and accounts receivables and payables as bookkeepers help create and collect on accounts. They also ensure all bills get paid.

A bookkeeper also needs a good understanding of computerized accounting software. This helps keep accounts reconciled and secure for clients and keeps the information easy to access.

Why Consider a Bookkeeping Business?

If you have a good eye for detail, organizational skills, and an ability to deal with numbers, bookkeeping might prove a good option for you. If you’re willing to put the work in that’s needed to find clients, and you like the idea of independence, setting up your own business adds to the prospects.

Bookkeeping jobs are in demand.  You have even greater potential if, after experience, you begin your own bookkeeping business. You can set your own competitive pricing and have flexibility in your work schedule.

Benefits of Providing Bookkeeping Services

The startup costs for a bookkeeping business are relatively low. Your costs involve the software and tools needed, certification and insurance, and other setup fees. If you work from home, these costs can be even lower.

You also have options regarding the services you offer. You can offer overall services, or you can specialize in the areas that interest you. This will also depend on the market needs for your area.

You also have the option to create a virtual business with bookkeeping. There are many online tools that can help you provide all the services needed.

Steps for Starting a Bookkeeping Business

If you want to start your own business, you need to make sure you get the proper training to be able to offer these services. Then you need to set up a plan, get the necessary documentation, collect the needed tools, and set up your business as a separate entity.

It’s important to complete each step to protect your business and ensure you can break into the industry. You want to plan well so you avoid obvious issues that could arise.

Training

While a specific certification isn’t necessary to set up a bookkeeping business, it can help validate your business and your qualifications to do the work of your business. Online education programs provide useful ways to train for bookkeeping jobs. A certificate or degree program can teach you how to use the needed tools and understand the process behind the things you’re required to do.

Create a Business Plan

Any business requires a plan of action, including a freelance business. This means determining goals, options, finances, and market research.

You need a mission for your business. This includes how you want your business perceived as well as your plans for growth.

You also need to determine the services and package options you want to provide, including pricing. This also requires some market research to understand your competition and your opportunities. You also need to create a financial plan including startup costs and plans for financial growth.

Your business plan also needs to include marketing strategies. You need to combine all your research to determine how much you can spend on marketing and how you plan to get the word out.

Legal and Administrative Needs

You want to protect your business from possible legal issues in a financial career. This means it’s a good idea to incorporate your business to protect your personal assets. To do this you need to decide on a business name.

Once you have a business name you should also set up a business address, phone number, and email separate from your personal contact info. Even if you work from home, you want to keep your home info separate from the business.

You also need to determine the structure of your business. Will you have a sole proprietorship, a corporation, or something in-between? These decisions will help you make the other necessary administrative decisions.

Separating Business and Personal Finances

For added protection for your personal assets, you should look into business insurance based on your incorporation decisions. You should also protect personal finances with separate accounts for your business.

You need separate, checking, savings, and perhaps credit card accounts under your business name. If any issues arise, this will ensure any personal assets stay out of any legal problems.  It also helps you to divide your personal financial activities from your business.

You also need to determine how you’ll raise the funds necessary to start your bookkeeping business. You can use personal funds, but you don’t want to rely on this. Look into loans and other funding options to ensure you are sufficiently funded in order to cover the start-up costs.

Collect the Necessary Tools

You’ll need office equipment, including filing cabinets, a computer, and a printer. You may have some of this equipment already, but you might want to consider getting separate equipment for your business needs.

You also need accounting and CRM software. Do your research to determine which accounting software will fit your needs and make sure it will work with the tools you already have available. One good option is QuickBooks, which has an online version.

You want to have the proper software to keep up with separate clients and track your work to bill accordingly. Security is important, so make sure you have secure software with additional protection for the computer you use to protect from hacks and viruses.

The Paper Trail

You should also research file sharing options to determine the best way to share needed documents with your clients. You want to choose an option that your clients already have or can easily access.

If you have any paper trails, you need the ability to keep these documents locked up from any prying eyes. It’s your responsibility to ensure the safety and privacy of your client’s information. This includes anything with financial information as well as contact information.

Market Your Services

Once you have everything set-up, it’s time to market your services. There are industry job sites and professional associations you can join to help you find clients, but you also want to look into other options.

Create a Website

A website will act as your best marketing tool. Everything else you do can lead potential clients to this website, making it easier to share information about your services. You can set up a website for free or somewhat inexpensively to start, and may want to enhance it when your business starts taking off.

You should consider a blog with your website so you can share your expertise and any news. You also want a services page where you explain the packages you offer. Make sure you provide a contact page as well to make it simple to find you.

All these considerations will also help you show up in searches for bookkeeping services in your area. The content you add to your website can also get used in other marketing opportunities.

Industry Events

You also want to look into attending industry events to network and market your services. This helps you find clients while staying up with industry news.

You can set up a booth at these events to draw attention to your services. You can also network with others in your industry which can open up new opportunities from referrals.

You can also look into presentations at these events to further market your services. If you provide valuable information in these presentations, people are more willing to come back to you.

Advertise on Social Media

Since you can set up social media accounts for free, this proves an economical way to get the word out about your services. You will need to pay for some ads to reach more people, but you can post content from your website to funnel people back to your main marketing tool.

You can also use these sites to interact with leads. Answer questions and provide value to make them want to reach out to you.

Getting Started With Your Business Ideas

If you’re looking into starting a bookkeeping business, or you think another option will work better, your first step should involve education and training. Would you like to consider your options? Check out the online programs available for your new career.

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