How To Start Bookkeeping Business (2023)

Running a bookkeeping business involves tasks like managing income and expenses, processing payroll, and preparing tax returns for clients. A crucial aspect of starting this business is creating a solid business plan. Additionally, mastering client acquisition techniques is vital, and maintaining a polite demeanor when interacting with clients is key.

If you’re considering bookkeeping as a side hustle for some extra cash, you might be tempted to skip a few steps. However, it’s essential to follow each step outlined in this article diligently to ensure success in your venture.

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1. Become a certified bookkeeper

if you want to gain credibility with the potential clients, you need to prove that you have the capability to do bookkeeping work. Moreover, if you are a CPA, then you have already proved that you have knowledge and skills to perform the duties which are required in a bookkeeper, and further you can proceed with the next step.

Although, if you have either formal education in the field of accounting or bookkeeping or if you have worked earlier as a bookkeeper, then also you need to get a certification before you start a bookkeeping business. Moreover, you also need to consider getting certified in a few of the leading accounting software providers, like QuickBooks and FreshBooks, in order to become a certified bookkeeper.

2. Create a Business plan

writing a business plan is a very common thing for all the people who are planning to start a business. Although a business plan can be definitely used to obtain funding for your business, also you need to exercise a writing business plan is all about the process. While writing a business plan for your business you need to think of all the aspects of your business, like what products and services you will sell, how you do the marketing of the products and the services and the very important thing is keeping all your competition on your top list.

Also, you need to create a financial plan for your bookkeeping business which should include at least one year of profit and loss projection, Cash Flow, and a complete projected Balanced sheet.

3. Incorporating your bookkeeping business

there are many administrative tasks which must be done before you can start serving through the business. This step is no doubt very important because it helps you to establish your business as a legitimate one. It will also help you to limit your personal liability, such as if your company ever sued, the only asset you losses is business, not your personal assets like your home or personal bank account. This will save you whether you are doing your business as a full-time or part-time.

4. Business Name

this is a very important part of your business. You need to name your business a fantastic and unique name. The name will represent your business at the local, state, and federal level. Naming the business can be fun as well and stressful as well. The name must convey your brand as it will be having the potential to catch the customer’s attention. Also, the name is exactly related to your business so that people don’t have to think before collaborating with you. And the name will be clear enough to express your business idea to the customer.

5. Structure of Business

mostly there are four types of common business structures, that are sole proprietorship, partnership, limited liability company (LLC), and corporation. The structure of your bookkeeping business will determine your personal liability. Therefore if the company is ever sued, your ability to raise capital and your tax liability.

6. Set up Business Operations for your Bookkeeping Business

setting up operations is another task for you. Just after incorporating the business, you need to set up the operation and functions. It is very important to separate your business operations from your personal finances in order to take full advantage of the liability protection given to you during the incorporation process. At first, you need to hire an answering service for your clients. By this, you can easily gain trust in your customers.

There are other operational services like setting up a business bank account to separate your financial and personal bank accounts. Also, you need to establish a business mailing address, so that you keep your customer away from the personal accounts. As a bookkeeper, you might need to get some liability protection in case you make any mistake on the client’s book. Therefore, it is very important to make insurance for your company.

7. Get the correct Accounting Software-

determining the correct software for your accounts is also very important and an overwhelming task. Bookkeeping and Accounting software is the best software for a bookkeeping business, but you can also take efforts and choose your own software. In which you will be comfortable.

8. Fund your bookkeeping business

funding your business is another hectic task. Since the start-up cost might be high so funding is very important. As everything can not be done alone. In general, the start-up costs for a bookkeeping business can be fairly low if you work out of a home office as opposed to leasing office space, which we will discuss in the next section.

The experts say that you should always have at least six months’ worth of expenses in the bank. You can also apply for a business credit card, apply for a loan or anything else which can help you to overcome the costs.

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9. Set up an office for your business

make sure that your bookkeeping business should have a place which can be at home or any other place. This will help you to grow your business independently, and you will get a place to work from. You can keep your home as the office address as well.

Later on, you can separate your office space from your living space. Setting up your workplace at your home will be in the budget as well. You can take up a separate room from where you can work separately. Deduct the expenses from your personal charges and pay from the business account. Also, don’t forget to take those home office tax deduction.

10. Marketing of your Bookkeeping Business

Marketing is a very important part of any business. Make sure your marketing skills should be strong enough to grab the attention of the clients. As much as you market your product, you will get a customer and your product will gain popularity. You can also hire some agency who can do the marketing part.

Conclusion:

Now that you have a clear understanding of the business tips, you’re well-equipped to start your Bookkeeping Business. Stay updated with the latest trends in bookkeeping and make attending seminars and workshops a priority. This will help you stay informed about new developments in the industry and enable you to adapt and grow accordingly. Additionally, focus on honing your skills to enhance your professional abilities in the field of bookkeeping.