how to start a bookkeeping business

If you’re still unsure of whether bookkeeping is the right choice for you, let’s break down some of the advantages and disadvantages. You can’t expect to earn a living from bookkeeping unless you actually know how to bookkeep. If you want an in-depth idea of the principles of bookkeeping then it’s a good idea to consult a training program or book on the topic, but here are some key aspects.

  • For example, you can charge a monthly rate for ongoing bookkeeping help and then offer a 10% discount for bookkeeping clients who pay a year in advance.
  • The great thing about starting your own bookkeeping business is that all of these decisions will be yours to make.
  • I strongly believe that your bookkeeping services should be built into a subscription model on a monthly fixed-fee basis.
  • And credentials such as CPA, EA, attorneys, and state certifications (when required) are all still attractive to firms looking to hire.
  • However, to help market your business and set it apart amongst the competition, you may decide to specialize in a specific industry.

You need insurance in place and must ensure you’re complying with current anti-money laundering regulations. Most bookkeepers carry out Level 1 and Level 2 qualifications before setting up their own bookkeeping practice, adding to further qualifications as they progress their career in bookkeeping. Thinking about starting a business or already putting your ideas into action? We’ve got the resources, expertise and software to help you achieve your goals. Setting your fees and getting your pricing right for your bookkeeping business will take a bit of work but don’t feel that you need to price yourself too low. Generally, you’ll charge either an hourly rate or a monthly fixed fee.

What to Expect in This Starting a Bookkeeping Business Guide

Bookkeepers use a chart of accounts to see all of the accounts in a company’s general ledger. In many instances, an accountant prepares the initial chart, and the bookkeeper references it while recording transactions. The income statement is a holistic report that shows revenue and expenses over a set period of time. It can be produced for one period to gain insight into the month’s profitability, or produced for the year to period. And sometimes it can be produced to include comparisons against the prior year’s same period or the prior year’s year-to-period data.

  • It serves as a road map to ensure you correctly record and report  all necessary financial transactions are recorded and reported correctly.
  • Create a comprehensive business plan that outlines your target market, services offered, pricing structure, executive summary, marketing strategies and financial projections.
  • The first step you’ll need is a business bank account, which allows you to keep your personal and business expenses separate.
  • Determine your pricing structure based on factors like the complexity of the work, industry standards and the value you provide.

The AIPB and the NACPB are the top two associations for bookkeepers. Professional associations often promote or host seminars and training. Sometimes, members can get discounted rates on these events as membership perks. Being part of these associations can also help you build your network with other bookkeepers, CPAs, and tax experts. Investing the time to attend a conference will give you those continuing education credits you need to keep your bookkeeper or CPA certification.

Certifications for your bookkeeping business

Since good record keeping relies on accurate expense tracking, it’s important to monitor all transactions, keep receipts, and watch business credit card activity. Many bookkeeping software options automate the tracking process to eliminate errors. The cost of starting your own bookkeeping business will depend on the services you plan to provide and the initial equipment you will need to purchase. However, if you plan on providing all the bookkeeping services yourself, you can theoretically start your own business for next-to-nothing.

You’ll need to note the amount, the date, and any other important details to ensure you can accurately summarize your finances when it comes time for tax season. Purchase receipts should always be kept as proof that the purchases took place. I’m an entrepreneurial CPA that founded Xen Accounting, a100% cloud-based accounting firm, in 2013.

How much should you charge for your services as a bookkeeper?

A bookkeeping checklist outlines the tasks and responsibilities you need to do regularly to keep the books up-to-date and accurate. It serves as a road map to ensure you correctly record and report  all necessary financial transactions are recorded and reported correctly. Inventory is the stock of goods a business has on hand or in transit, waiting to be sold. The value of inventory can significantly impact a company’s financial statements, so accurate tracking and management is vital. If you plan to hire employees, such as an administrative assistant, you may also want to seek a small business loan.

how to start a bookkeeping business

Once you’re qualified, QuickBooks will place you on their ‘Find a ProAdvisor’ site for free, increasing your probability of finding clients. There are other perks, too, like a discounted Squarespace website builder and email marketing service. The ‘Bookkeeper how to start a bookkeeping business Lab’ is a program for people who want to go from being a standard bookkeeper to building a thriving business. You’ll have access to a great community and advanced learning content. However, you’ll need to have at least five clients already to join it.