Are you looking to start your own bookkeeping business? If so, you are in the right place. In this blog article, we'll go through everything you need to know about how to open a bookkeeping business.
We'll cover everything from choosing the right accounting software to marketing your business.
So, if you're ready to help other businesses with their finances and billing SOPs, keep reading.
What Services Does A Bookkeeper Offer?
A bookkeeper is an important part of any business. They keep track of the financial transactions and ensure that the books are balanced. Without a bookkeeper, it would be difficult for a business to stay organized and run smoothly.
Bookkeepers can offer a wide range of services, from setting up your bookkeeping system and maintaining your records on an ongoing basis to preparing your year-end financial statements. They can also advise on improving your record-keeping systems and processes.
Some bookkeepers also offer payroll services, including preparing and filing your payroll tax returns. If you have employees, it's important to ensure that your bookkeeper is up-to-date on all the latest payroll tax laws and regulations.
In addition to their traditional bookkeeping services, many bookkeepers now offer cloud-based solutions that allow you to access your financial information anywhere in the world. This can be a great option for business employees who travel frequently or work remotely.
How To Start A Bookkeeping Business In A Few Easy Steps
Now that you know what services a bookkeeper can offer, you may wonder how to start your own bookkeeping business.
Here are the essential steps:
1. Choose a niche
When you are starting a bookkeeping business, it is important to choose a niche. This will help you give a few ideas and stay focused on the type of clients you want to work with and the services you want to offer.
For example, you may want to specialize in small businesses or nonprofits. Alternatively, you could focus on providing small business bookkeeping services in a specific industry, such as restaurants or retail.
If you choose a niche, it can help your small business in several ways. First, it can make marketing easier because you can target your advertising and marketing efforts to reach your ideal clients.
Second, it can help you build a reputation as an expert in your field, making prospective clients more likely to hire you. Finally, it can help you save money on marketing and advertising costs.
2. Research the competition
Once you have chosen your particular business niche, it is time to research the competition. This will help you understand the accounting industry and set your prices.
To research the competition, start searching for bookkeeping businesses in your area. Then, look at their websites and see their services and how much they charge.
You can also read online reviews of successful businesses to understand what customers think of them. Finally, you can contact the Better Business Bureau to see if there have been any complaints against bookkeeping businesses in your area.
After doing your research, you should have a good idea of the going rate for these services in your area. You can then set your prices accordingly.
3. Create a business plan
The next step is to draft a business plan. This will assist you in visualizing your bookkeeping goals and methods.
Your business plan should include an executive summary, a description of your services, information about your target audience, a marketing plan, and cash flow details.
The most important part of starting any business is deciding what services you will offer.
Here are some common bookkeeping services that businesses need:
Setting up a bookkeeping system:
If you are starting a new business, one of the services you can offer is setting up a bookkeeping system for your clients. This can include setting up a chart of accounts, invoicing and billing, and choosing accounting tools.
Another service you can offer is maintaining your client's financial records. This can involve recording transactions, preparing financial statements, and reconciling accounts.
If your clients have employees, you can also offer payroll services. This can include preparing and filing returns for payroll taxes.
Many bookkeepers now offer cloud-based solutions that allow businesses to access their financial records from anywhere in the world. This can be a great option for business employees who travel frequently or work remotely.
Another service you can offer during tax season is tax preparation. This can involve preparing and filing federal, state, and local tax returns.
4. Registering your business
Now that you have decided what services you will offer and created a business plan, it is time to register your business entity.
The first step is to choose a name for your business. Choose a name that is easy to remember and spell. Your name should also reflect what your business does.
For example, if you specialize in bookkeeping for small businesses, you could include the word "small" in your business name.
Moreover, include keywords in your name that will help people find your business when they search online. For example, if you are a bookkeeper in Los Angeles, you could include the word "Los Angeles" in your business name.
Once you have chosen a name, you need to check with your state to see if it is available. If it is available, you can then register your business name and get a relevant license.
5. Get Certified
There are many different bookkeeping certifications available, and the one you choose will depend on your business goals. If you are not a Certified Public Accountant (CPA), we highly recommend that you get certified with one of the following two organizations:
The National Association of Certified Public Bookkeepers (NACPB) is the largest bookkeeping association in the United States, with over 25,000 members. The NACPB offers the Certified Public Bookkeeper credential, which is recognized by the American Institute of CPAs (AICPA).
To earn the CPB credential, candidates must pass an exam and have two years of experience working in bookkeeping. The NACPB also offers the Certified Bookkeeper credential, which does not require an exam but four years of experience working in bookkeeping.
The American Institute of Professional Bookkeepers (AIPB) is the largest bookkeeping association in the United States. They offer several certifications, including the Certified Bookkeeper (CB) credential.
To become certified, bookkeepers must pass an exam covering basic and advanced bookkeeping topics. The AIPB also offers a Master Bookkeeper credential for those who wish to further their knowledge and skills. Certified Public Accountants (CPAs) won't need these certifications, though.
You can also get certified in different business accounting software. Some of the popular ones are:
If you are a bookkeeping or accounting professional, you may be eligible to join the FreshBooks Partner Program. As a partner, you will access exclusive resources, training, and support to help you grow your business. You will also be able to use the FreshBooks brand in your marketing materials. The AICPA recognizes the FreshBooks certification program.
The Quickbooks ProAdvisor Certification is a professional certification for accounting and bookkeeping professionals using QuickBooks software. The certification program is administered by Intuit, the company that makes QuickBooks.
To become a QuickBooks ProAdvisor, you must pass an online exam that tests your knowledge of QuickBooks software. You can take the exam at any time, and there is no time limit.
Once you have passed the exam, you will receive a certificate from Intuit that you can print out and display in your office. You will also be listed on the QuickBooks ProAdvisor website, which is a directory of certified QuickBooks
The Xero Partner program provides accountants, bookkeepers, and other financial professionals with the training, resources, and support they need to succeed in cloud accounting.
The Xero certification program is a key part of the Xero Partner program. This certification guarantees that partners have the knowledge and skills to deliver their clients a best-in-class cloud accounting experience.
Xero provides its partners with dedicated support, marketing resources, and ongoing training and education. The company also offers a partner referral program, which allows partners to earn referral commissions when they introduce new clients to Xero.
6. Organizing the business
Now that you have your business goals and know what bookkeeping credential is right for you, it's time to get organized. The first step in organizing your bookkeeping service is to choose a business structure.
There are four main business structures: sole proprietorship, partnership, limited liability company (LLC), and corporation. Each business structure has its own advantages and disadvantages, so you'll need to choose the one that best suits your needs.
Once you've chosen your business structure, you'll need to obtain the necessary licenses and permits.
This will vary depending on your location and business type. Before beginning your business, you should consult with your local chamber of commerce or city hall to find out which licenses and permits you'll need. They might need a few bank statements from you.
The next step in setting up your business is to open a business bank account. You can keep your personal and business finances separate if you open a business bank account. A dedicated business credit card will also make it easier for you to track your expenses and income.
Once your business structure is in place, and your licenses and permits are secured, you'll need to set up your physical office space.
This will include choosing a location, furnishing your office space, and purchasing the necessary equipment and supplies. Small business owners can also run a virtual bookkeeping business with an online project management tool.
Once you have a profitable business, you can always establish an office and hire employees. You might also want some insurance coverage offering liability protection for your services.
7. Get the right software
Bookkeeping firms need software to track income and expenses, generate invoices and reports, and manage payroll. There are many different software programs available, so choosing one that meets your specific needs is important.
FreshBooks, QuickBooks Online, and Xero are the most popular bookkeeping software programs. FreshBooks is cloud-based accounting software that offers invoicing, time tracking, expense tracking, and client management.
QuickBooks is a popular desktop accounting software that offers features similar to FreshBooks.
Xero is another cloud-based accounting software offering invoicing, bank reconciliation, and payroll features. We recommend that you use QuickBooks Online because it offers the most features and is the most user-friendly.
There are also some practice management software and payroll software that you'll need to handle your business clients.
When choosing bookkeeping software, you must consider your specific needs and choose a program that offers the needed features. You should also consider the price, ease of use, and customer support.
Once you've chosen the right bookkeeping apps for your business, get certified in them so you can offer the best possible service to your clients.
8. Pricing your bookkeeping services
Now that everything is in place, it's time to start pricing your services. The best way to do this is to research the going rates for bookkeepers in your area.
You can check with local bookkeepers or search online for average rates. Once you know the going rate, you can set your prices based on your experience and services.
If you're just starting out, you may want to offer discounts to attract bookkeeping clients. Once you have a few bookkeeping clients and the business grows, you can raise your rates. Be sure to keep your rates in line with the going rates in your area so you can remain competitive.
The most important thing to remember when pricing your services is to be fair and reasonable. You don't want to overcharge your clients, but you also don't want to undercharge them. Be sure to set a rate that you're comfortable with and that will allow you to make a profit from the prospective client.
Also, don't forget to factor in the cost of your software, supplies, and office expenses when pricing your services.
9. Market your business
This is the step that can make or break your business. Marketing is the process of creating awareness and interest in any business. Marketing aims to reach your target market and convince them to use your services.
You can use many different marketing strategies to reach the right audience. Some common methods include print ads, flyers, postcards, online ads, Search Engine Optimization, professional social media accounts, and email marketing.
One of the best ways to market local businesses is to optimize the websites for local SEO. This means ensuring your website appears in search engine results when people search for bookkeepers in your area.
To optimize your site for local SEO, include your city and state in your keywords, title tags, and meta descriptions.
You should also create local citations, which are online listings that include your business name, address, and phone number. You can create local citations by listing your business on directory and review sites such as Yelp, Google My Business, and Angie's List.
When creating your marketing materials on your Facebook business page or elsewhere, include your contact information, website, and social media links. You should also include a brief description of your services and what sets you apart from other bookkeepers. Be sure to use keywords that your target market will be searching for.
If you're unsure how to market your bookkeeping business, we recommend hiring a marketing firm or taking a marketing course. Marketing is an important part of any business, and it's worth the investment to get it right.
10. Take care of finances
You must figure out the estimated startup costs of your business model. This includes office rent, equipment and supplies, marketing, and employee salaries.
To keep your business expenses low, we recommend using cloud-based accounting software and outsourcing your payroll.
Cloud-based accounts payable software is typically more affordable than desktop software and offers many of the same features. Outsourcing your payroll will save you time and money and free your employees to focus on other tasks.
When it comes to marketing, we recommend that you use online marketing methods such as SEO, social media, and email marketing. These methods are typically more affordable than traditional marketing methods and are more likely to reach your target audience.
Running a bookkeeping business can be expensive, but there are ways to keep your costs low. You can save money and time by using cloud-based accounting software and outsourcing your payroll. And by using online marketing methods, you can reach your target audience without breaking the bank.
Frequently Asked Questions
How do I start a bookkeeping business from scratch?
You can take some key steps to get your business up and running. The first thing you should work on is developing a strong business plan. This will help you figure out how to structure and market your bookkeeping business and set financial goals.
Once you have a solid business plan, the next step is getting the necessary licenses and permits. Depending on your location, you may need to obtain a business license or permit before starting operating.
Once you have all the required paperwork, you can start marketing your business to prospective clients. As a small business owner, you should always be aware of the startup costs and ensure you have the necessary funding.
Is it worth starting a bookkeeping business?
It depends on a few factors, such as your experience, qualifications, and the demand for such services in your area. If you have the right skills and qualifications and the strong demand for bookkeepers in your area, then starting your own business could be a great opportunity.
However, if you don't have the right skills or qualifications, or there is limited demand for bookkeepers in your area, starting your own firm may not be the best option. Ultimately, it's important to weigh all the factors before deciding.
How do I start a bookkeeping business with no experience?
You need to do a few things to start a bookkeeping business with no experience. First, you will need to find clients who need accounting and bookkeeping services.
You can do this by networking with other businesses or advertising your services online or in local publications. Once you have found some potential clients, you must submit a proposal outlining your services and rates.
Finally, you will need to be prepared to answer potential clients' questions about your experience and qualifications. Following these steps, you can start a bookkeeping business without experience.
How do bookkeepers get clients?
There are a few ways that bookkeepers can get clients.
The most common way is through referrals from existing clients or other business professionals. Another way is to market their services to businesses in their area. Word of mouth is also a powerful marketing tool for bookkeepers.
If they provide excellent service to their first client, then that client will likely recommend them to others. Finally, bookkeepers can get clients by joining professional organizations or participating in trade shows and other events.
Are there any benefits of getting certified for bookkeeping?
There are many benefits to getting certified as a bookkeeper. Certification can help you:
1. Stand out from the competition:
In today's competitive market, certification can help you stand out from the crowd. When prospective clients see that you are certified, they will know you have the knowledge and skills to provide quality services.
2. Increase your earnings potential:
According to the Bureau of Labor Statistics, certified bookkeepers earn 20% more than non-certified bookkeepers. Certification can also help you get promoted or move into a higher-paying position.
3. Enhance your professional credibility:
Certification can help you build trust with clients and employers. It shows that you are committed to your profession and have the skills to do the job.
4. Get access to exclusive resources:
Many bookkeeping associations offer exclusive resources, such as discounts on software and continuing education, to their members. These resources can help you save money and stay up-to-date on the latest bookkeeping trends.
5. Increase your satisfaction:
Certification can help you feel proud of your bookkeeping profession and give you a sense of accomplishment. It can also help you build confidence in your abilities and make you more likely to enjoy your job.
The bottom line
So, there you have it! You need to take those essential steps to start your own successful bookkeeping business.
Of course, as with any business venture, there is always more to learn and explore, but we hope this article has provided you with a strong foundation to build. Are you ready to get started?