Remember that your business plan is likely to evolve as you learn more about your business in relation to the market. It can be 10 pages, or it can be 1 to start, and it doesn’t have to be perfect—it just has to exist. Bookkeepers need certification (which we’ll go over later) and a working knowledge of accounting software, best practices, laws, and, in some cases, the tax code. Want to start a bookkeeping business but wondering, “Is starting a bookkeeping business profitable? I’m an entrepreneurial CPA that founded Xen Accounting, a100% cloud-based accounting firm, in 2013. Following its acquisition in 2018,I started Future Firm to help accountants fast-track the growth of a modern, scalable accounting firm of their own.
You’re also responsible for training and managing your in-house team, which requires time and resources. Therefore, consider getting a small business loan to launch your bookkeeping company and cover your startup costs. Small business loans include term loans, SBA loans, lines of credit, and short-term loans. However, bookkeeping startup costs are relatively low, especially if you decide to start a virtual bookkeeping business and work from home instead of leasing office space. After completing your business plan, deciding on the type of insurance you want to get, and the necessary infrastructure to run your business, you have a good idea of your startup costs.
Outsourcing vs. DIY bookkeeping — which one should you choose?
- However, you need to know how to attract and land bookkeeping clients.
- Entering transactions, categorizing expenses, and filing receipts are good weekly habits.
- To present your business and brand to the world, you’ll need a professional online presence.
- As a small business owner, you get to decide how many clients you want to take on, how much money you want to make, and how many hours you want to work during the day.
- By following these detailed steps, you’ll ensure that your business is not only up and running but also poised for success and growth.
- This growth not only benefits your business but also enriches your professional profile.
This includes using accounting software, separating personal and business finances, and establishing internal controls. Regularly reviewing your financial reports and consulting with accounting professionals can also help you prepare for future financial needs and challenges. Accurate bookkeeping isn’t just for internal use; it’s crucial for meeting tax obligations and potential audits. Sales tax, payroll tax (if you have employees), and maximizing tax deductions are all important considerations. Keep everything—receipts, bank statements, invoices, and all other financial documentation—for at least three years, and some records even longer. Meticulous record-keeping makes tax preparation significantly easier and ensures you’re prepared for any scrutiny.
What skills does a bookkeeper need?
When you’re just starting out, you might only need help with monthly reconciliations. Even with a solid bookkeeping system, startups often face hurdles. And accrual-based records transactions when they’re earned or incurred — even if cash hasn’t changed hands yet.
Understanding your financial data empowers you to make data-driven decisions that go beyond simple tax compliance. It allows you to identify trends, optimize spending, and strategize for long-term success. Solid accounting practices are essential for sustainable growth and attracting investors.
Step 4: Choose the Structure of Your Bookkeeping Business
Certification is also available within certain software products, too — for instance, you can get certified in QuickBooks. Our partners cannot pay us to guarantee favorable reviews of their products or services.
Starting a bookkeeping business in 2024 can be a lucrative endeavor, especially with the rising demand for financial management services. Whether you’re a seasoned accountant or new to the field, this guide will walk you through the essential steps to launch your own bookkeeping business. This step-by-step guide will map out the process to get started on your own bookkeeping business. We’ll cover building a bookkeeping plan, creating a strong accounting system, marketing and gaining clients and other helpful tips to get your What is partnership accounting business set up. While most think they should wait until the business starts to generate cash flow, it’s important to track expenses immediately so that they can be deducted as startup costs.
It’s been used by more than 17,000 other women and men to start a bookkeeping business. On average, a small business might require anywhere from 5 to 15 hours per week for bookkeeping. However, this can fluctuate during periods of high activity such as at the end of the financial year or during tax season. As your client base grows, consider hiring additional bookkeepers or administrative help to manage the workload. This expansion can help you take on more clients and offer additional services.
Step 5: Price Your Bookkeeping Services
Allocate several thousand for branding materials (business cards, logo design) and directory listings to drive visibility both online and in regions you service locally. Independent and remote bookkeepers should have an online presence for marketing services. Search Google Maps and online directories like Yelp to find providers advertising in your geographic target area. Visit their websites and profiles to analyze service packages, pricing models, client types, differentiators, and customer reviews. For local firms, search online directories and visit offices to gather sales literature and service offering details.
A remote bookkeeper can handle the day-to-day tasks, ensuring accuracy and efficiency while you concentrate on strategic initiatives. This not only saves you time but can also be more cost-effective than hiring a full-time, in-house bookkeeper, especially in the early stages of your startup. If you’re ready to explore how automating your bookkeeping can transform your business, check out FinOptimal’s automation solutions. How can I prepare my startup’s bookkeeping for future growth, like attracting investors? To prepare for future growth, implement robust bookkeeping practices from the start.
How to start a bookkeeping business FAQ
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Choose Your Business Structure:
You can research how to hire employees and download or bookmark any necessary forms like the W-4 and W-9 through the U.S. Work on your target market at the same time as your niche and UVP. A good place to start would be signing up with the apps you’re using. If you read until this part, you may have noticed that I have mentioned my podcast episodes a couple of times. You can also check out my best forums compilation article to discover more online communities worth joining. Just like Accounting For Architects most industries, bookkeeping undergoes regulatory changes, tech trends, and evolving client expectations.