How to Start a Bookkeeping Business in 8 Steps

Cody Cromwell
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Become a Certified Bookkeeper

Becoming a certified bookkeeper takes work and dedication, but it’s a rewarding but challenging career path you could pursue. In this guide, I’ll explain how to find your first job and get started.

You will find that you need to undergo an official state-certified bookkeeping exam to earn your designation. In order to take the exam, you will need to complete a financial working knowledge course. This is similar to taking a college or university course on financial literacy, accounting, or business. But don’t be intimidated thinking that you need to be a certified finance or business major to take the exam. In fact, you don’t. If you have a background in an unrelated field, you can still take the exam.

The preparation process and the bookkeeping certification exam is in itself a significant investment in time, money, and study. But it’s well worth the effort because the career and salary prospects are excellent. Additionally, many people learn unique skills, training, and certifications that provide an advantage when they begin their career.

Here are eight steps to start a bookkeeping business and ultimately turn it into a full-time career:

Work Your Way Up the Bookkeeping Ladder

Create a Business Plan

A business plan is a written document that describes your business to potential investors and provides potential customers with a clear idea of what you offer. The purpose of a business plan is to convince others that your business is successful and profitable and will grow over the long term.

A business plan describes your business from the perspective of an outsider, which means it will present an objective view of your business, rather than the subjective perspective of the people actually involved with the business. If you are a marketing manager or investor, you want to know how the business will be sold, how the money will be made, and how the company will be run.

For some people a business plan is a waste of time, and for others it’s an essential tool in getting funding for the business. Still others may want to include a business plan as part of the marketing plan for the business, if they are selling a service rather than a product.

A business plan is an essential tool not only for MBA and other graduate level business courses, but also for small business owners who want to raise capital for their business. The plan will demonstrate to investors how the business is run. For instance, the investors will want to know how the employees (your employees) are compensated, how the money is spent on things like wages, and how the business will be sold.

Incorporate Your Bookkeeping Business

Select a Business Name

Perhaps the most important choice you will make. Choose a name for your new business that will stand out, command respect for your expertise, and you’ll see the most demand for the type of bookkeeping services you offer. While a name like Profit Genie may be catchy, you’ll likely work harder at convincing colleagues and clients that you provide quality services even with a goofy name.

How to Choose a Business Name

Research the competition. Do other bookkeepers in the area already have a catchy name? If so, what words are they using? Is it a similar type of business? If so, what have they done to attract business? If their business name is similar, how are they different? Are they using a memorable color? Is it a color that closely resembles your company’s logos?

Set clear boundaries for your business. How will your business differentiate itself from other bookkeeping companies? How will your services be different? How will your company stand out from others that offer the same services? Will you sell by phone, online, or mail order? How will you handle client inquiries? What texts or forms will you use?

Select a Business Structure

Set Up Business Operations for Your Bookkeeping Business

Danielle, a single mother, wanted to open a bookkeeping business but was unsure of the types of paperwork she’d need to keep. At first glance, it seemed like she’d have to draft contracts, purchase equipment, and sign up with multiple vendors, but she discovered some bookkeeping software that did almost all of the work for her. That software is Quickbooks, and now she can concentrate on paperwork that matters, like payroll. Without the added administrative burdens, she’s able to spend more time with her daughter. Good thing she didn’t have to do it all from scratch.

As a child, she used her mom’s checkbook and made straight-entry notes in her head for each recurring bill. She first taught herself checkbook math, then transferred the skill to each of her own accounts. In fact, the checkbook was her first source for bookkeeping. The truth is, anyone can start a bookkeeping business. The only question is: how?

Here’s an overview of the eight key steps:

{1}. Decide how you will use your bookkeeping business.
{2}. Choose a business structure.
{3}. Check if you need any licenses, permits, or tax returns.
{4}. Choose your bookkeeping software.

Hire an Answering Service

My First Company‒s phone calls have been answered by email for over 6 years now. Having an answering service is one of the first things you need to consider when starting out as a bookkeeping business.

You need a good answering service to cater to your core customer base. You’ll want to outsource this service to avoid being distracted as well. Hiring an answering service is a fantastic way to begin working on building your bookkeeping business.

Set Up a Business Bank Account

Before you can start a bookkeeping business, you’ll need to set up a business bank account. You’ll definitely want to check with your local bank to find out their bank account requirements to open a business account. If they do not accept business accounts, then it will be more cost effective to open your own account with one of the national banks that offers business accounts.

Some banks require you to have a minimum balance maintained in your personal bank account. Also, check with them to see what forms of currency they accept. A few banks may require you to have a minimum balance maintained in USD or EUR.

If you have access to a copy of your latest tax return, it can go a long way to opening a business account with your bank.

Set up a Business Business License

Before you can officially start a business, you’ll need to obtain a business license from the government agency charged with regulating local business activities.

There are two types of business licenses:

State Business License: … Deal with all business activities that are conducted in a state.

Local Business License: … Deal with all business activities that are conducted in a county, city, or town.

Establish a Business Mailing Address

E-mail and postal mail both have their advantages and disadvantages. E-mail is usually the preferred method of communication and is available 24 hours a day, 7 days a week. But, you’ll also need the requisite equipment to access your e-mail.

Postal mail can be less convenient but is an advantage if you want to grow your mailing list before launching your bookkeeping business. Putting your business address on your business cards, in your marketing materials, and in your business blog will help your business grow.

A business mailing address becomes a virtual hub through which all your correspondence with customers will pass.

Get Bookkeeper Insurance

Self-employed bookkeepers often have to be responsible for their own income-tax deductions. You’ll need to set aside money as a secure reserve, and you will need to have a way to pay for the insurance should anything happen to you.

The difference between journalizing and bookkeeping is that bookkeeping involves all the procedures and supporting records used to support journal entries.

A bookkeeper is a person who is specifically trained to record, analyze, and report at an enterprise’s financial accounts. The word "bookkeeper" is derived from the Latin "libra," which means "balance." The title of a bookkeeper is "bookkeeper." As a self-employed business owner, you are most likely already a bookkeeper. However, you may choose to outsource specific services to a bookkeeper.

Get the Right Accounting Software

In the modern business world, bookkeeping is an important aspect of keeping managerial records and viewing financial trends. The key to a successful bookkeeping startup, as with any business, is in the software you use to manage your bookkeeping business.

The initial cost to set up a bookkeeping business is more than offset by the amount of money that it takes for you to do your bookkeeping.

Since you are most likely not trained or certified to do bookkeeping, you will need to find software that is designed for the purpose. At the same time, you will want software that you can use for your bookkeeping and accounting data with a simple user interface.

Also, there are many choices when it comes to accounting software for your startup, so you need to be able to sort through all of them to know which one is the best for you.

Selecting the Software

The obvious way to determine the right software for your bookkeeping business is to discuss your business and bookkeeping needs with a bookkeeping software company. It is a good idea to visit, if possible, the software companies in the area where you would like to offer your services, but not a necessity.

The first thing to consider is how much time you can put into learning how to use the bookkeeping software, and how much time you want to spend on the software itself.

Bookkeeping/Accounting Software

With so many bookkeepers out there, why start your own?

Your franchise or business partner will help you deliver that extra level of service to your clients and take care of your company’s accounting in your absence. That’s not all…

Working for yourself gives you a sense of fulfillment and control that’s difficult to find elsewhere. You get to see all your hard work pay off on a daily basis and you can take on the business as you see fit.

Being your own boss also means you are accountable for your own actions, no one can fire you in times of need…you’re the only one you can trust with your business.

But before you can be your own boss, you will need a good bookkeeping solution. Though most businesses can handle their bookkeeping needs with a basic accounting system…

A lot of bookkeepers are realizing that personalized features and the ability to work inside a bookkeeping software gives them an edge over their competition.

Practice Management Software

If you're serious about your bookkeeping and you would like to start your own bookkeeping business, using a software such as LASERISES Bookkeeping is a must; it has many advantages over manual bookkeeping methods: you'll save money, time, and be able to concentrate on your work rather than worrying about the calculations.

Laserisés Bookkeeping is easy to use, and it adapts to your current needs, saving time and efforts and keeping everything under control. You can easily organise everything, from accounts receivable and payable to tax payments and bookkeeping, with suitable reports.

If you're an entrepreneur with a limited budget or a small business, you can use Laserisés Bookkeeping without spending a fortune.

And for the big accounting firms and business owners, Laserisés Bookkeeping can help you to improve your business with a centralised and digital ledger accounting system.

If you're a newbie accountant or a small accounting firm, you can start from the very first step with Laserisés Bookkeeping – a very user-friendly software for small accounting firms, where you can create sub-ledgers for different types of jobs with suitable transactions, in order to analyse your current finances.

Electronic File Sharing/Management

Meet one of the most important yet equally challenging roles in business – the bookkeeper. The role of the bookkeeper is to keep and manage all finances, accounts and data of the business. Monitoring all the financial aspects of the business on a regular basis is very important for the bookkeepers because it lets them take control of the business and helps them in the successful management of the business.

Now, the bookkeeping profession can be a very profitable one, but knowledge, training, skills and a genuine desire to learn and excel at the role are also essential parts of the bookkeeping job. This is the position that involves big responsibility so it is important to make sure that everything is managed in a proper manner.

Therefore, the most important part in starting a bookkeeping business is choosing the proper software that can take care of all financial needs of the business. Today, you can choose from many different types of software that are available in the market and they are very easy to use. To help you choose the right one, this article discusses the various choices of electronic file sharing/management software that are available in the market and the factors you should consider before selecting an app.

Fund Your Bookkeeping Business

Before you can start a bookkeeping business, you need to find a place to set up shop or find a client to hire you to manage their books.

When your business is up and running, you’ll need to develop a workable system to manage your finances. It’s important to understand the ins and outs of bookkeeping so that you know exactly what you’re required to do and how to do it properly.

Apply for a Business Credit Card

Set Up a Home Office for Your Bookkeeping Business

If you decide to start a home-based bookkeeping business, you’ll need a home office in which to work. While you can certainly rent an office in a shared or privately owned building, starting your business out in your home will be more cost-effective and allow you to run your business when it’s convenient for you.

One of the most important considerations is to ensure that your office is soundproofed, as noise from the outside can easily infect your office. Use a carpet pad if your floor isn’t particularly thick, or use carpet and a soundproof blanket to make sure the sounds of your neighbors isn’t bleeding through. You may also consider soundproofing your walls with insulation materials.

Set Up a Managed File Storage System

You’ll want to make sure you have access to all of your records whenever you want them. A managed file storage system will allow you to organize your files in a manner that’s easy for you to retrieve and search. When you have a managed file storage system, you can access and save your files on any computer or mobile device.

Market Your Bookkeeping Business

The first step to starting a bookkeeping business is to market your services to prospective clients. Your goal here is to let your clients know that you are available, competent, and affordable.

Your general idea may be "my system is unique, it works and everyone should use it," but nobody is going to use it unless they know it exists. You have to tell them, and then you have to let them know how exactly they can access it.

Once you’ve let it be known that you are available to be commissioned by a prospective client, it’s time to start shopping for potential clients.

The ideal candidate for you will be a small or medium sized business with simple bookkeeping needs. This won’t be everyone, but it will be enough to keep you busy.

Here’s how to go about researching small and medium sized businesses:

Get out your entire contact list and compile a list of every business you have ever done business with. Make sure to include real estate brokers, accountants, and contractors.

Then go through the contact list and make a note of every business that still works with that person or business. This is likely to be a larger business since you’ve probably moved on and dealt with new clients.

The best way to stay on top of industry trends is to become part of the industry at large. You don’t have to be a CPA or a bookkeeper to contribute to what’s going on in the bookkeeping world.

One easy way to do that is to write for your local or state magazine. While you can find bookkeeping-related instructional content on the internet, it can be helpful to get a more impartial opinion.

Network with other bookkeepers.

It can be exciting to get together with fellow bookkeepers for a Happy Hour, but the opportunity to network is one of the best reasons to do it. Keep in contact with your fellow bookkeepers and use this knowledge to stay on top of industry trends.

Attend Accounting/Bookkeeping Conferences

Consultant meetings & conferences can be an excellent way to introduce your idea to potential business partners. Attending similar conferences is a good way to find out whether people visiting the same conference will be interested in you. Bring business cards and brochures. If you can’t make it, drop off a self-addressed envelope or advertisement.

Develop Product/Service

While attending conferences, you may also learn more about products or services you don’t yet offer. That’s a great opportunity to research your new idea and determine whether it’s something that’s worth pursuing.

Network with Potential Partners

Networking is a great way to meet people who may be able to help you with a start-up or who may be interested in a proposal for a new product or service. When you network, you’re looking for people who can help you on a higher level, such as a mentor or investor.

Sign up for Blogs and Newsletters

Many bookkeepers are too busy to blog or write articles. Fortunately, there are many free services that will allow you to establish an online presence. Start by signing up for blogs and newsletters that serve your target market. If you are looking for bookkeeping jobs, sign up for newsletters from trusted companies. This is where you’ll get the most leads because it’s common for accountants and bookkeepers to be approached by potential clients.

If you are a full service accountant or bookkeeper, sign up for the direct mailing lists of contractors, CPAs, and attorneys. These people have the money to pay for your services and they will likely sign up for your mailing list to keep track of your work and better manage their own accounts.

Join a Professional Bookkeeper Association

If you’re considering starting a bookkeeping business, you’ll have to consider the potential competition. But you can negate that competition in a couple of ways.

First, you’ll have to consider joining an association that has a vested interest in the work you’re capable of doing. An association will provide an organized voice for bookkeepers who are looking to work on their own.

Second, you can work to gain enough expertise to be the only one providing the service. This means you have to make all of the mistakes yourself.

Bottom Line

How to Start a Bookkeeping Business on Your Own and Become a Professional

Hand in an electronic file just as you would the paper version, the accountant will pay attention to the accuracy of your data entry and comparing it to the official version.

They will make sure that you have interpreted the entries correctly, therefore, they can assess a more accurate overall result of your complete.

You will have no trouble in convincing clients because you are a certified accountant.

You can make your business a success if you have extensive knowledge of accounting software’s like QuickBooks.

You get set in first two or three years, and you can buy everything you need.

As the first step, you have to complete accounting tutorials so you can succeed in entering data correctly.

The accountant has to set up a bookkeeping and accounting system, so the employees are gone over in order to guarantee proper procedures are in place.

The bookkeeper hires and trains employees so they can perform their duties effectively.

The number of employees depends on the size of the bookkeeping business and the types of services that are offered.

The bottom line is that if you are looking for a lucrative and highly rewarding business to start – book keeping is that business.

Chapter 15: Common Homework Help Questions