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

• Post by: Sam
• 11:16AM Feb 11, 2022
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Of course, becoming a competent and proficient bookkeeper still takes time and money. And although certification is optional, it’s a good idea to get certified since it lends credibility to your business. All these considerations are part of the bigger picture of your bookkeeping business plan. Ready to take the first steps to start your own bookkeeping business? You’ll just need to get your business registered and insured before you set up a business bank account and website.

If you’re specifically running a totally virtual business, a website is extra important since it can demonstrate to clients your skills. And luckily, there are plenty of website builders to make creating your website a breeze. A major part of registering your business and opening up shop is choosing a business entity. This will govern how you pay taxes as a small-business owner, but also what kind of liability protection you have in case something goes wrong and how you’ll structure your business. A bookkeeper’s work is applicable across many different types of industries — after all, every business needs to track and optimize its finances.

Register the company

You may be ready to be your own boss, work virtually,  make your own hours, and build your own accounting software program. If you already have a computer, it costs relatively little to purchase the necessary software, learn how to use it, and begin offering bookkeeping services from your own home. There are more than one hundred million businesses in the United States and all of these businesses will have at least some sort of bookkeeping need. Many of these business owners do not have the time or skills to manage their books on their own, meaning there will always be potential clients available. Karbon ain’t cheap, but it’s certainly slick and very popular with certified public accounting firms & bookkeeping teams.

Quickbooks online is a fantastic software for small businesses, as it is one of the most widely-used accounting tools available. It is scalable, has tons of integrations, and includes a responsive mobile app for working on the go. The best thing about bookkeeping is that there’s always a demand. As long as there are businesses, there will be a market for people who can help them track their money. Although technology has reduced the need for human attention to some bookkeeping tasks, it has increased the need for people to operate these new systems.

Set Up Your Software

I have a dream to help several number of other companies having bookkeeping challeges. I started my journey to this dream by drafting some 2 paged idea plan of bookkeeping business however my plan was sketchy and was missing alot. I want to be self employed in my proffession but one who fits in the 21st century technology. If you plan to run your bookkeeping business or accounting firm off of Xero, then Xero Practice Manager could be worth looking into as it integrates very well into it. It’s not as user-friendly as the options above but it’s extremely powerful and many Xero users swear by it.

One way to measure success is by tracking your revenue, expenses, and profits. You can use accounting software to monitor your finances and generate reports that provide insights into your business https://www.bookstime.com/articles/virtual-bookkeeping performance. Key metrics include client retention, customer satisfaction, and project completion rates. Analyzing these metrics can help you identify areas to improve and growth opportunities.

How Your Bookkeeping Business Can Benefit From Whitelabelling?

Plus, as a bookkeeper, I get QuickBooks much cheaper for them than they would have otherwise. My ProAdvisor QuickBooks Online Plus subscription discount is $35 a month per client. So this bookkeeper who has eight clients would be spending $280 a month to hold their subscriptions.

Once you’ve formed your entity, you must apply for an employee identification number (EIN) with the Internal Revenue Service (IRS). The EIN identifies your business and is separate from your social security number (SSN). An EIN is optional for sole proprietors, but it allows you to receive 1099s at the end of the year from your clients without giving them your SSN. Its an amazing article, am impressed and motivated to organize my booking business and accounting plans. When you get clients and establish a team, you’ll want the option of being able to work remotely.

How does a bookkeeping business make money?

The exact process and costs for this vary from state to state and depend on the type of business structure you choose. If you decide to go into business as a sole proprietor, you can simply hang out your shingle and start working. However, registering as a limited liability company (LLC) gives you more liability protection. It’s not compulsory, but you might want to look into insurance for your bookkeeping business.

With a solid understanding of your target audience, unique selling points, and brand identity, it’s time to launch your marketing campaigns. Consider using a mix of marketing channels, such as social media, email marketing, and paid advertising, to reach your potential clients. Track your marketing efforts and adjust your strategies accordingly to maximize your return on investment. Finally, virtual bookkeepers need to invest in high-quality tools to offer bookkeeping services to other companies.

Steps to Starting a Bookkeeping Business

Now let’s look at some common marketing channels you can use to promote your business. There are several necessary insurance policies for bookkeepers. Each of them ensures that you are protected from various issues that may arise during your time in business. Once you’ve settled on a business name, secure the matching domain, business email address, and social media handles for any channel you intend to use. Work on your target market at the same time as your niche and UVP. Bookkeepers who are just starting out often opt for sole proprietorship unless they have additional employees.

You can even choose to market your services on Facebook and Google so that you can reach out to the potential audience. As a beginner, you should always start to price your service below your competition. Start by researching your local competitors and even the virtual bookkeeping services. Calculate your average price including your operational expenses. It is without saying, bookkeeping software is the engine of a bookkeeping business. There is plenty of reputed accounting software that is available online.

Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website. 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 to open a bank account. LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State.

• Each of them ensures that you are protected from various issues that may arise during your time in business.
• When starting an accounting firm, if you’re not crystal clear on what you are working towards down the road, prioritizing decisions, projects and initiatives becomes impossible.
• This is a trend that is completely changing how bookkeepers and accountants do business, so you must understand how it works since it will have a direct impact on your business.
• It takes time to become a great marketer on even a single social media platform, so be patient, and allow yourself to experiment with different types of content.
• It should include everything you deliver to your client and you shouldn’t have a ton.
• Don’t forget that investing in your business means investing in yourself.
• In a world where computers are obsolete within a few weeks after you purchase them, it’s tough to stay on top of new trends and changes in the industry.

Following the above steps will help get your bookkeeping business off to a good start, but don’t rest on your laurels. Keep up with changes in the industry and continue to evolve your skills. Once you’ve established yourself as a bookkeeper, consider getting training and/or certification in accounting, which will allow you to offer more services at a higher price point. Once you have set up your virtual bookkeeping business, the next step is to get the word out there and attract potential clients. This section will discuss how to effectively market your business and make it stand out in the competitive landscape.