You are detail-oriented and can balance multiple projects. If so, you might consider starting a bookkeeping company.
The digital age also offers many opportunities. Online businesses can be started of any size or shape, and you can do it from anywhere in the world.
This makes bookkeeping a high-demand business.
But Starting a bookkeeping business is daunting, especially if you’re new to the business or bookkeeping.
No worries! No worries!
A step-by-step guide to starting a bookkeeping company
Step 1 – Create a business plan
After you have decided to open a bookkeeping company, you can start creating a business plan.
Although you might not need a fund, there are important aspects to consider, such as marketing strategies, income projections, projected expenses, and targeted industries.
You must include the following when drafting a business plan.
- Your strengths, weaknesses, opportunities, and threats (SWOT).
- Market research – industry, competitors, and targeted clients
- You can do research on the problems that your service solves
- How to provide cost-effective solutions for your clients
- As a bookkeeper, you know how to project your cash flow and profits.
- Growth strategies
- Marketing strategies
Step 2 – Choose the business name and business structure
When you start your business, you will need to choose a business structure.
There are four types of business structures in the United States.
- Sole Proprietorship (Schedule C)
- Limited Liability Company (LLC).
- Partnership
- Corporation
Your tax liability and personal liabilities will depend on the business structure you choose, in case your company is ever sued.
Most bookkeepers prefer LLCs, but if your budget is tight and you’re just starting out, a sole proprietorship might be a better option.
But, be careful! Before making any final decisions, consult an attorney.
You will need to choose a name for your business that is both easy to remember and attractive to clients.
Step 3 – Apply for business permits and licenses
There is no licensing for bookkeeping. However, you can obtain national certification through the National Association of Certified Public Bookkeepers- Certified Public Bookkeepers. This will give potential clients credibility about your abilities.
You should also consider licensing and permits according to the location of your business, such as some local, state, and federal registrations, home business licenses, Employer Identification Numbers (EIN), etc.
Step 4 – Open a separate bank account for your business
You should separate your personal and business finances in order to keep track of business income and expenses.
Consider opening a credit card and bank account for your business when you begin a new venture.
Step 5 – Select the accounting software
Good bookkeeping software can make all the difference when it comes to keeping track of your customers’ bookkeeping and managing their workflow quickly.
It’s easy to keep track of books nowadays thanks to digitization. Log in and you can make data entries, retrieve statements, reconcile, and much more.
There are many accounting software options available, such as
- QuickBooks
- FreshBooks
- Xero
- Wave accounting and more…
All these software do the same basic things, so it is important to be familiar with them all to increase flexibility.
Step 6 – Get business insurance
Professional liability insurance is a wise investment for your bookkeeping business.
This insurance covers you and your employees for mistakes made or perceived errors in handling clients’ financial information.
Prices can vary depending upon variables like where a business is located and how many employees it has.
To get an accurate estimate of the cost of insurance, ask for quotes from several providers. Compare all quotes and consider factors like coverage limits, exclusions, and premiums.
There are many insurance companies in the US that offer professional liability policies for as low as $50 per month.
Step 7 – Create a marketing plan to get clients
You will need to market your services and make them a household name.
Promotion is key to your success in this highly competitive market.
Social media marketing is the best way for you to get exposure. It’s up to you to choose the right way.
Make sure your social media profile is focused on bookkeeping tips and related information if you want to reach the market via social media.
Fill in all sections of your social media bio. This will allow clients to get all the information they need.
Your business will be more visible the more people are likely to buy your services.
Marketing should look professional. You can try several marketing strategies.
- Join online forums
- Advertise on Facebook, Instagram, LinkedIn, etc.
- Guest blogging sites: Get published
Bookkeeping costs
A bookkeeping business generally has a low starting cost, especially if you choose to operate it virtually. If you have a laptop, you’ll only need to pay $2,000 to $3,000 for the initial setup.
This will pay for a website, business insurance, as well as the monthly subscription fee for bookkeeping software like QuickBooks, Xero, and others.
Virtual bookkeeping is a low-cost startup option.
A large business that rents a space can have a startup cost closer to $50,000 100,000.
These are the most common startup costs for large businesses.
- Filling cabinets & office furniture
- Computers and printers
- Bookkeeping software
- Software for project management
- Telephone & internet
- Office supplies
- Initial months of working capital for salaries, internet, and utilities
What does a bookkeeper actually do?
This question is not easy to answer because bookkeeping can vary from one business to the next.
Here are some of the most common tasks bookkeepers perform.
- All transactions should be recorded and categorized
- Reconcile bank accounts
- Prepare sales tax reports
- Invoices and bills should be kept on file
Let’s take a close look at the above tasks.
Why would you need a bookkeeper to keep your books in order?
You will reap the following benefits if you have a highly-qualified bookkeeper:
- You will make better budget decisions because you know exactly where your money goes
- Audit-proof and detailed documentation
- You can focus completely on your business
- You will be able to analyze the seasonal flow of business
- Help you understand revenue, costs, profitability, etc. Your business
- You can rest assured that your books are accurate and available for tax inspection.
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Summary
The role of bookkeeper requires patience, curiosity, and the ability to find the root causes of unresolved problems. Trust is also important because the financial health of a company is dependent upon this person. They are not only trusted with sensitive information about your business, but you also depend on their accuracy. A great bookkeeper is a vital part of any business looking to grow.