how to start a bookkeeping business

You can create a dropbox for each client, and they can start submitting their information. This system is much more secure than sending files via email or flash drive. To access the information in the document-sharing program, you need a user ID and password. And more importantly, there’s no need for physical backup because files are in the cloud.

  • With a well-written profile and a few simple messages, I’ve found that you can get great results from LinkedIn.
  • For the most part, a simple online presence is relatively easy to start with minimal start-up costs.
  • You’ll also need to choose a bookkeeping software for your bookkeeping business.
  • This may help you attract prospective clients, as well as provide some much-needed cash flow as you’re starting.
  • You may also look to become a limited liability company and potentially even office space at the time you hire on employees, so bear those regulations and costs in mind as well.

This step may be the most important aspect of beginning a successful bookkeeping business. You will want to do your research before pricing your services, and you will also want to maintain some level of flexibility to adjust your rates in the future. You want your business name to reflect you as a person and the type of services you provide. Your business name is the first thing that lets customers, clients, competitors and others in the marketplace know about who you are and what you do.

Must-know terms for bookkeeping

If you’re considering a business credit card, you might want to look for one that offers a generous rewards program and/or charges no annual fee. If you’re a traditionalist and are more interested in tracking income and expenses than bank connectivity or cloud access, check out GnuCash. While most larger businesses have an accounting staff that takes care of financial transactions, as a small business owner, the job of accountant typically falls to you. For business owners without a bookkeeping or accounting background, the prospect can be overwhelming.

  • If you’re running a solo firm, you’re likely going to be looking at an S-Corp, which allows you to pay yourself as an employee.
  • You should plan on paying for help with online advertising, web design, search engine optimization (SEO), and website content management.
  • Your CRM may already have this functionality built into the program.
  • As a one-person operation, you may find it hard to get back to clients right away, especially during tax season.

This trend creates ample opportunities to start a bookkeeping business. If you love numbers and helping people, this guide will show you how to start a bookkeeping business from the ground up. You don’t have to be an accountant or a financial whiz, you just need to follow the process. With the right software, it’s very simple to learn, and day-to-day work doesn’t require any heavy math. Not only can anyone become a bookkeeper, but every business needs a bookkeeper, which means there’s no shortage of customers out there.

Income Statement

Unless they are a chartered certified accounant, bookkeepers should not prepare or sign tax returns. Despite its name, good accounting software isn’t just for accountants. It can be used for your bookkeeping business, allowing you to view the finances of your clients and create financial reports, among numerous other things.

  • There are many reasons why you might want to start a bookkeeping business.
  • You might also consider applying for a business credit card to help cover expenses until you start making money.
  • It even offers a free 30-day trial so that you can see if it works for your business.
  • FreshBooks pricing starts at $15/month for the Lite version, which is perfect for freelancers and contractors, with the option to move up to the popular Plus plan at $25/month at any time.
  • The terms “bookkeeper” and “accountant” are occasionally used interchangeable, but they are in fact 2 different roles.
  • Lenders, additional bookkeepers, contractors, and key relationships will all need to be considered.

You’ll also be able to begin pursuing potentially much bigger clients that have very complex needs. By this point, you have an official bookkeeping business with its own business bank account, registration, plans, and certifications. If you have already purchased the equipment you think you’ll need, that means you are finally ready to begin pursuing clients. Networking, advanced marketing, freelance platforms, and direct communication are just a few of the ways you might be able to get your “foot in the door” and land the first, important client. In addition to your business plan, you will also need a well-organized marketing plan before you can get started.

How much should an accountant charge per hour? Or should accountants charge a fixed fee?

The last thing you want is to come up with the perfect name only to find that it’s already taken. Your UVP should be informed by both your competitor research, your target how to start a bookkeeping business client’s main needs, and your unique set of hard and soft skills. See our guide on How Much Bookkeepers Charge for an up-to-date review of bookkeeping rates by state.

  • Great news, because this step-by-step guide will cover the critical 7 steps you’ll need to follow to set up a modern bookkeeping practice and to land your first clients.
  • There are countless options out there for bookkeeping software that blends a good price with solid features and functionality.
  • In addition to tax consequences, your personal liability in the event of a lawsuit can vary dramatically by business structure, so be sure to consult with an attorney.
  • Niches, like many things, are often dependent on location, interest, and understanding where there is a need across different businesses.

The ability to go above and beyond virtual bookkeeping is crucial if you want to become a great bookkeeper and earn a great living. Most businesses cost tens if not hundreds of thousands of dollars to launch. One that rocks and shows you how to be a great bookkeeper in a “paint by numbers” format. Keep your skills up to date, evolve the depth in which you know your preferred platforms and stay apprised as their features change, as well. You can always attend professional events, too, such as conferences and networking events. Don’t forget that investing in your business means investing in yourself.