Happy clients are more likely to stay and refer your services to others. You should also know your marketing plan, your prices, and what software you plan to use. In later sections, we will go more in-depth into each of these things.
While sole proprietorships are typically the easiest to manage, other business structure options can be helpful if you add employees as your business grows. Keep in mind that your choice of business entity will influence how you pay your taxes, as well as what type of liability protection you’ll receive—if any. Opening a business bank account can make it easier to keep track of what funds go in and out. You can open a business bank account at a traditional bank, credit union, or online bank. You’ll need to provide your personal information, along with your business details, in order to open an account.
Other business ideas you might be interested in
When first starting out, market yourself as a professional who is well-versed in managing accounts, reconciling transactions, providing financial overviews and balancing budgets. Ask for testimonials from people who have utilized your services in the past and spread the word about your offerings through a website or social media. This is not exhaustive documentation for the information required for bookkeeping.
And, of course, your rate isn’t fixed — you can always change it if you feel like you’re not priced correctly. If your clients will be sending you things such as receipts or statements, you might want to consider the tool that how to prepare accounts receivable aging reports you’ll use to share files. A popular option is Dropbox, in which you can create a shared folder that both you and your clients have access to. There are two pieces of the business plan that deserve a little extra consideration.
The primary objective of bookkeeping is to create recorded data of operations that can be summed and used for multiple reasons—generating financial reports. However, bookkeeping requires certain data and figures to be accurate. Hence, bookkeepers use a bookkeeping checklist to track their bookkeeping tasks. One of the fastest ways to gain credibility with potential clients is to prove that you have the knowledge necessary to do bookkeeping, payroll, and perhaps tax returns. We can help you to be ready for the next season, our team of certified bookkeeper helps firms leveraging better flexibility and faster turnaround time. Start by creating a business plan, structuring your business, and incorporating it.
Check each of these tasks off of your bookkeeping checklist
This will make your business appear more professional and maintain your privacy. This step is important because it establishes your business as legitimate and may help to limit your personal liability if your company is ever sued. Whether you’re doing this part-time or full-time, you don’t want to skip this step. If you’re not a CPA and want to prepare tax returns, I recommend becoming an Enrolled Agent (EA) through the IRS. EAs must initially pass an examination and then complete annual continuing education to renew their certification every three years. While no formal education or classes are required, the examinations are difficult and will prove you have the knowledge to serve tax clients properly.
Here’s what yours might look like as you draft a plan for your bookkeeping business. You could also use online posting sites such as Craig’s List or LinkedIn and share that you are looking for bookkeeping clients. One thing that will help you is creating a niche that you want to become an expert in. Once you get into the network of piano teachers and learn that business really well, and, hopefully, your clients will suggest you to their friends for services. The main thing you need starting out is a computer, otherwise it’s just basic office supplies! As a virtual bookkeeper, your computer is 95 percent of what you will use, but other than that you may want a printer, paper, pens, and things like that.
Examples of successful bookkeeping businesses to inspire you
A bookkeeping business is a service-based type of business that offers professional bookkeeping services to clients. Bookkeepers typically work with small and medium-sized businesses (SMBs) including startups, freelancers, sole proprietors and small corporations. They help clients manage their financial records, track income and operating expenses, prepare financial statements and ensure compliance with tax regulations.
- While sole proprietorships are typically the easiest to manage, other business structure options can be helpful if you add employees as your business grows.
- But bookkeeping gives you the option of starting on a shoestring budget.
- With this, bookkeepers will be able to ensure that all the necessary data and information to be used in bookkeeping will be gathered.
- Many of the operations are automated in the software, making it easy to get accurate debits and credits entered.
- Of course, some businesses don’t need this level of assistance and prefer to go with virtual bookkeeping services.
Tracking your clients’ finances and creating financial reports can be exhausting if you’re doing everything manually. Thanks to modern-day technological advances, we can lean on accounting software to make our lives easier. If you’re starting from scratch and working on a budget, there are a number of free accounting software options that can help you with your bookkeeping business.
Checklist for Starting a Bookkeeping Business
You need to register your business with the state and obtain a business license. Additionally, you may need to obtain other licenses and permits, depending on your location and the services you offer. Freelancers have to pay their own taxes for their bookkeeping business.
How to Start a Bookkeeping Business
When creating a bookkeeping business, start by figuring out what kind of business you want to be. Next, you will want to choose a bookkeeping software and learn how to use it properly. Most small businesses require high startup costs such as renting or buying a building, purchasing inventory, and buying supplies. To identify your target audience, you need to consider factors such as age, gender, income, education level, location, and industry. You can use this information to create buyer personas, which are fictional representations of your ideal customers. By understanding your target audience, you can tailor your marketing messages to their needs and preferences.
When things slip through the cracks, your clients lose money and their trust in you. There are a lot of moving parts when running your bookkeeping business. However, implementing the right tech stack will help you automate time-consuming processes, increase productivity, and grow your bookkeeping firm. Virtual bookkeeping is becoming increasingly popular due to advances in technology. It allows you to serve clients from anywhere, which can expand your reach and reduce overhead costs.