A Beginner's Guide To Building A Bookkeeping Business
/Do you have an eye for details? Are you familiar with any popular accounting or bookkeeping software? Then you could start a bookkeeping business to make money on the side or even make a full-time income from it. As a bookkeeper, you will typically complete tasks like recording financial transactions, updating financial records, and creating statements for your clients.
Even if you do not have a degree in accounting or a related subject or do not have experience working as a bookkeeper, you can still build a bookkeeping business from home. Here is a beginner's guide to building a bookkeeping business so that you can know everything you need to know about starting your own bookkeeping business.
What is bookkeeping?
Bookkeeping is the method of recording all financial transactions in a business. Before the internet was invented, a bookkeeper would keep the book of business in books and ledgers. But now, bookkeepers use software and computer programs to record all financial transactions of their clients' business. Online bookkeepers can work anywhere from the world thanks to the internet. More and more small business owners and solopreneurs in particular are hiring bookkeepers.
Here are just a few of the services a bookkeeper can provide:
Keeping track of daily transactions
Issuing invoices to customers
Collecting receivables
Processing bills
Recording bills and cash receipts
Creating financial reports
Processing payrolls
Keeping an eye on cash flow
The type of services you can offer as a bookkeeper depends on your skills and experience.
How much can I earn as a virtual bookkeeper?
If you are a beginner online bookkeeper, you can earn anywhere from $15 to $25 per hour working on a freelance basis or working for a company. But you can earn anywhere from $20 to $40+ per hour as a freelance bookkeeper, depending on your experience and who you work with. Some experienced online bookkeepers earn $75 per hour or way more.
According to ZipRecruiter, the average hourly pay for a bookkeeper in the USA is $19 per hour. If you become a professional bookkeeper, you can charge a higher fee for your bookkeeping services.
Please note: The Money & Mimosas philosophy is to charge clients a flat fee. Charging by the hour is not a sustainable practice for building wealth. To learn how to package and price your services, check out the Money Makers membership.
Once you have been hired by some clients, have some experience, and have testimonials from a few clients, you could attract high-paying clients.
The amount you can charge for your bookkeeping business depends on your skills, experience, and clients' needs and budget. If you run your own bookkeeping business, it will be up to you to decide your rates.
How much you can earn each month will depend on how many days you work in a month, how many clients you have, and the level of your experience and skills. If you have a few high-paying clients, you may earn $5,000 per month. If you build a large clientele you can earn way much more than that per month.
As you gain more experience, you can charge even more for your services. If you take a certification and/or training course,
How to build a bookkeeping business
Today, you can start a bookkeeping business from home thanks to the internet, working remotely for clients across the globe. While you do not need professional bookkeeping experience and/or formal education to become a bookkeeper, you must have the skills required to become a bookkeeper
If you are thinking about starting a bookkeeping business, here is how to build a bookkeeping business:
Estimate your startup costs
If you already have a good computer, a reliable internet connection, and the skills required to become a bookkeeper, you can start a bookkeeping business straightaway. But if you do not have the skills and knowledge required to become a bookkeeper, there are a few costs to start a bookkeeping business. These are:
Bookkeeping certification and training course
Accounting/bookkeeping software- sometimes this is free if you join the company’s bookkeeping network
Bookkeeping insurance
Some of the other costs, depending on your business structure, can include:
Business cards
Paid online ads
Office supplies
A scanner
A website
A business telephone/cellphone
An answering service (e.g. Go Answer)
Learn what skills you need to have
You will need certain skills such as accuracy, reliability, and organization to work as a bookkeeper. If you work as a virtual bookkeeper, you will need excellent communication skills.
Detail-oriented
Organizational skills
Computer skills
Math skills
Having a certification and/or training will demonstrate your knowledge and skills in the field.
Take a bookkeeping course
If you are completely new to bookkeeping, then you might want to take a bookkeeping course or carry out a relevant training to demonstrate your skills and knowledge as a bookkeeper to your potential clients. There are both paid and free bookkeeping courses you can choose from to become a professional bookkeeper.
Bookkeeping courses are often available at local community colleges and training schools. You can also take a free or paid bookkeeping course online. A bookkeeping course or program will teach you everything you need to know to become a bookkeeping professional with a certification.
If you want to take a bookkeeping training course, many websites offer online bookkeeping training for free. Some bookkeeping certification courses are designed for only experienced bookkeepers, like American Institute of Professional Bookkeepers (AIPB).
Choose your business structure
You must decide on a business entity type for your bookkeeping business. There are a few options, such as a sole proprietorship, limited liability company (LLC), and S-corporation. While a sole proprietorship is the easiest option to handle your business, it can also be the riskiest option, as you will be liable if someone sues you for anything that goes wrong with the company or a client. By choosing an LLC business entity, you can protect yourself in the event anything goes wrong. Visit this guide to learn more about the benefit of forming an LLC.
Get the right bookkeeping software
Most clients will probably expect you to use their bookkeeping software, but if you are not already familiar with any of the popular accounting or bookkeeping software, it is essential for you to learn how to use a popular bookkeeping software. You may need to buy or subscribe to relevant software to learn how to use it. You may be able to sign up for relevant software for free too so that you can learn how to use it.
If a client requires you to use your own bookkeeping software, you may need to buy relevant software or use a free piece of software, depending on the client's needs. Some of the best full-service accounting and bookkeeping software include:
Xero
Freshbooks
Sage
Quickbooks
Get bookkeeping insurance
If you or an employee in your business make any serious mistake while taking care of sensitive information about a client, this could have a negative impact on your client's business and the client may end up suing you. You can purchase the Errors and Omissions Insurance policy that protects your business and reputation in the event this happens. It can cost you around $200 a year. You may also want to get other relevant coverages to protect yourself.
Identify your target clients
You can choose to offer bookkeeping services to clients in a particular niche. For instance, you may choose to offer bookkeeping services to fitness coaches or instructors or local service businesses like locksmiths, florists, etc. Once you have a niche in mind, all you need to do is sell your bookkeeping services. If you want to offer freelance bookkeeping services, you will need to apply to jobs for bookkeepers, advertised on freelance sites, career sites, etc. places online.
Set your rates
Once you have decided on the services you want to offer, next you will need to decide how much you want to charge for your bookkeeping services. According to Indeed.com, the average hourly rate for a bookkeeper in the United States is $18.22 per hour as of writing this post.
As a beginner bookkeeper, you should set your rates based on the level of your experience and skills. You should also take into account your target clients when setting your rates. You can evaluate your rates from time to time as you gain more experience and/or offer specific services.
Please note: The Money & Mimosas philosophy is to charge clients a flat fee. Charging by the hour is not a sustainable practice for building wealth. To learn how to package and price your services, check out the Money Makers membership.
Advertise your bookkeeping services
At the beginning of starting your bookkeeping business, you will need to advertise your new business. There are a few ways to promote your bookkeeping business, including:
Advertise your services on your website or blog
Promote your bookkeeping business on social media
Set up profiles on freelance sites
Visit online forums that are frequented by your targeted clients
Ask your family and friends for referrals
List your business on Google My Business
Advertise your service via Google Ads and Facebook Ads
Reach out to local businesses personally
Find clients for your bookkeeping business
Once you have decided what services to offer and set your rates, you are ready to start looking for clients for your bookkeeping business. If you want to start your own bookkeeping business, you will have to set up a service website to sell your bookkeeping services. Don’t worry if you aren’t tech-savvy, there are several website platforms that make it easy to set up a website. My favorite is Squarespace.
Finding your first client for your bookkeeping business is going to take a lot of effort. But once you have worked with a few clients and have a few testimonials to showcase on your site, it will be easier to find more clients for your bookkeeping business.
You can contact new businesses in your area to see if they need the help of a bookkeeper to handle their finances. If you want to work with local clients, you can work from home or work onsite at your clients' premises.
If you are seeking to work with remote clients, there are many websites where you can find job postings online. Here are some sites to find online bookkeeping jobs if you want to work remotely as a freelance bookkeeper:
Upwork
Freelancer
PeoplePerHour
Fiverr
Indeed.com
Intuit
FlexJobs
If you want to work for a bookkeeping company, here are some of the best bookkeeping companies online to find bookkeeping jobs online:
AccountingDepartment.com
Bookminders
BELAY
Robert Half
Acuity
ClickNWork
ClickAccounts
BIDaWIZ
LedgerGurus
ABBM Group
1-800Accountant
In conclusion
Now that you know how to get your bookkeeping business started, it is time to write a to-do-list based on the above steps to build your bookkeeping business. If you follow the steps outlined above, you will be able to build your bookkeeping business quickly.
