There are many important aspects of beginning and maintaining a bookkeeping business. These include managing expenses and income, producing payrolls, and tax returns for business clients. If you are wondering how to start a bookkeeping business, you’ve come to the right place.
If you intend bookkeeping to be your primary income source, you need to know how to formulate a good business plan and get clients. Along with this, you need to be aware of other important aspects of a bookkeeping business.
Become a Certified Bookkeeper
You need to start the process by becoming a certified bookkeeper, and to show potential clients that you have the skills and knowledge a bookkeeper needs. To run a successful bookkeeping business, you should get a certificate before starting.
Institutes like the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) are excellent to certify with. You can also try getting certified in some well-known accounting software providers like FreshBooks and QuickBooks as well.
Formulate a Bookkeeping Business Plan
Creating a solid business plan helps you fund your business. In the process, you understand more about all the aspects of running a business. This includes your services and products, marketing strategies, competitors, and financial planning.
You need to consider the following points when it comes to your business plan:
- Company overview
- Competitive analysis
- Cover page
- Executive summary
- Financial projections
- Marketing plan
- Start-up costs
Incorporate Your Bookkeeping Business
To establish your business as a legitimate one, you need to do many administrative tasks. This will help to protect your assets in the long run. First of all, you should select an apt business name that conveys your brand to customers.
After that, proceed to choose a proper business structure. That will determine your tax liability, personal liability, and ability to raise capital while helping secure your business.
Prepare Business Operations for Your Bookkeeping Business
With your business successfully incorporated, you can proceed to set up essential operations for the same. This includes getting a bookkeeper insurance policy and starting a new business checking account.
By virtue of the latter, you can separate your business operations from your personal finances to benefit from liability protection. Hire an answering service like Go Answer to serve customers efficiently. You should also obtain a proper business mailing address as soon as possible.
Get an Adequate Accounting Software
If you’re thinking about how to start a bookkeeping business without software, you need to rethink it. There are different aspects of your business, each of which requires a separate software tool.
For example, QuickBooks is a top choice when it comes to bookkeeping/accounting software. It offers several payroll options for you to choose from as well. Similarly, TurboTax is an excellent piece of software for preparing your tax return.
Both Xero and QuickBooks Online offer practice management software for you. Dropbox is an excellent way of sharing and storing your documents and vital files.
Funding Your Bookkeeping Business
You will have a fair idea of your required start-up costs by the time your business plan is finished. Ideally, it will help if you keep about six months’ worth of funds in your bank account. You can open a business credit card account to help you with business expenses and cash flow in the early stages.
Further, it will also help you a lot with managing your taxes. New bookkeeping businesses generally use a start-up credit card to float working capital expenses, get rewards, and manage employees.
Prepare a Home Office for Your Bookkeeping Business
A home office will help you manage costs in the early stages of your small business.
On the other hand, you can try to meet them at their office or virtually. Make fair use of home office tax deductions as well. Make sure you establish a professional business having a skilled voicemail facility. If you cannot set up a home office, consider virtual office space.
Marketing Your Bookkeeping Business
Marketing is a vital aspect of your business and one that can be quite tricky. You can go for a website customized for your business, with a specialized company. The resulting website will help increase revenue, enhance client loyalty, and boost brand awareness. Apart from this, you can try out other methods of marketing as well, such as:
- Becoming a business advisor with the Small Business Development Center (SBDC)
- Becoming an adjunct instructor
- Establishing a client referral program
- Establishing one or more professional social media account
- Getting certified in an accounting software
- Joining a local Meetup group of accountants and bookkeepers
- Signing up with a bookkeeper freelancer website
- Getting mentioned in a blog or featuring in a published article
Keep Up With Industry Trends for Bookkeepers
It can be extremely hard in the contemporary world to stay ahead of new trends and industry changes, especially when you’re trying to figure out how to start a bookkeeping business in 2020.
However, this particular aspect has a direct effect on your business. And therefore, it is in your best interest to put in as much effort as possible into the same.
For instance, you should make time to attend bookkeeping and accounting conferences. Besides learning about new and obsolete trends in the industry, it will give you education credits to keep your CPA or bookkeeper certification. You will also meet other bookkeepers and accountants to share ideas with.
You can also obtain important information by signing up for monthly newsletters and blogs. Keep in mind that not every bookkeeping/accounting blog is useful. However, you should consider the ones listed below:
- e-News subscriptions (IRS.gov)
- Insightly Accountant
- Journal of Accountancy
- The QuickBooks Blog
- Xero Blog
Try to Join a Professional Bookkeeper Association
Being a part of at least one professional bookkeeper association, such as the National Association of Certified Public Bookkeepers and the American Institute of Professional Bookkeepers, will help you a lot. You can get an AIPB membership of one, two, or three years. It notably comes with a subscription to a monthly newsletter, free accounting, payroll, and QuickBooks help on a member answer line.
Similarly, the NACPB membership gives you access to practice certification exams, going ahead with professional education, training videos, and much more.
With the right planning and implementation, you can easily take the first steps and figure out how to start a bookkeeping business.