Are you thinking of getting into the bookkeeping business? With the population in the world increasing, the need for skilled bookkeepers has increased in 2024.
According to a latest survey, 45% of the respondents assumed that accountants’ positions would become even more strategic in the coming two years and provide their clients with more financial and business advice. This trend demonstrates the need for more and more bookkeeping experts as their valuable information is crucially important for businesses.
In this guide, you will find the simple steps, recommendations and solutions on how to successfully start your bookkeeping business.
Let's get started!
What is a Bookkeeping business?
A bookkeeping business entails reviewing the company’s accounts and processing the business’s records with regard to its subsidies. As a virtual bookkeeper, you keep essential financial responsibilities of a business, such as:
- Recording Transactions
- Managing Accounts
- Preparing Financial Statements
- Tax Preparation
- Budgeting and Forecasting
- Reconciling Bank Statements
- Advising Clients
- Maintaining Financial Software
- Client Communication
- Continuing Education
Things to Consider Before Starting a Bookkeeping Business
Starting a bookkeeping business requires preparation and understanding key responsibilities. There are a few crucial success factors which need to be considered before moving forward:
- Assess Your Skills: These would include a self-evaluation on strength, weakness and opportunities of the bookkeeping services to be offered.
- Understand Local Regulations: You should look at the ordinances concerning operation of a business within this state and the permissions that you may require to obtain to engage yourself within bookkeeping business.
- Choose Your Niche: So it is appropriate to decide whether a choice of a focus, for example, the retail industry or the real estate industry or both, is suitable.
- Invest in Software: Choose the most appropriate and reputable accounting software that will suit your business by improving your productivity.
- Develop a Pricing Strategy: The rates you offer to your clients should be competitive and should not be exploitative. You should research the market prices and understand how to price for bookkeeping services. You can make use of the free bookkeeping pricing template to price the services.
- Create a Business Plan: State short-term and long-term objectives, client base, pricing and marketing techniques for your bookkeeping business.
- Online Presence: Build a professional website and leverage social media platforms to get accounting leads.
Step-By-Step Guide To Start Your Bookkeeping Business
It is worth starting a bookkeeping business as it can be an interesting adventure. Here’s a comprehensive step-by-step guide to help you establish your own bookkeeping practice successfully:
1. Define Your Niche and Target Market
Determine what kind of bookkeeping services you need to provide and who will be your customers. That means you can focus all your attention on a specific group of clients.
- Industry Focus: Pick niches,where bookkeeping services are in great demand, for example, retail, healthcare, or eCommerce.
- Client Size: Market to those who are either too busy to manage their own accounts or do not have the knowledge of how to do it.
- Service Specialization: Consider offering specialized services like cash flow management, tax preparation, or payroll.
Pro Tip: Use free bookkeeping proposal template to customize your services, pricing, etc., to improve chances of winning clients.
2. Create a Business Plan
Be sure to state the following: objectives, who you’re marketing the bookkeeping business to, price strategies, and how you plan to promote the bookkeeping business. This plan will help you to make the right choices as you advance in your business.
- Revenue Goals: Have well defined monthly and annual revenue targets in terms of the expected number of clients.
- Service Packages: The services should also be classified based on the need of the client by developing packages such as basic, standard and premium.
3. Choose a Business Name and Structure
Make sure you select the name that people will be able to identify easily for the services you provide. Choosing on the legal structure of the business: the type of company that you will be carrying out your bookkeeping business whether as a sole trader or an LLC is also an important factor when starting this business. This decision will influence your taxation level or rather how much of your earnings will be taken in tax.
Pro Tip: Check out some inspirations for accounting firm names to have a strong brand identity and attract more clients.
4. Register Your Bookkeeping Business
File with the state or local government the name under which your business is to be run. Some of the important steps to be taken are to acquire licenses and permits required to operate a business legally. This should be done in order to avoid operation without compliance to the relevant laws governing your bookkeeping business.
- EIN Number: If the commercial activity is going to be significant and independent or if it is going to have employees, get an EIN from the IRS.
- Local Permits: It’s important to determine whether your city or state demands a particular business license for bookkeeping services.
- Banking: Open a separate business bank account to keep your finances organized.
5. Set Up Your Office
Whether you are a home based business or have leased office space there are some below rules which help for setting up office and requisite items like Accounting software, Computer etc.
- Home Office: It is also important to make your home office space free from interference in addition to meeting the set laid down home business policies.
- Software Needs: Install essential software for accounting firms like QuickBooks or Xero and ensure it's updated regularly.
- Security: Set up secure cloud based business management software or a physical filing system to protect sensitive client data.
6. Invest in Accounting Software
The following are some of the issues that one needs to ponder in order to acquire the right accounting software for the bookkeeping business.Select software that would adequately meet your application but would also require minimal training to learn how to work on this particular software. This will assist you to properly handle your clients’ accounts and consequently provide satisfactory services.
- Software Features: Look for features like invoice automation , expense tracking, and bank reconciliation.
- Integration: Ensure the software can integrate with other tools you or your clients use, like payroll systems or CRM software.
Pro Tip: Learn more about what constitutes an accounting tech stack and why it is important.
7. Develop a Pricing Strategy
Determine how much you will bill your clients, as either a fixed rate or an hourly rate, or as a contract basis. Since your plans include increasing sales, consider finding out what other bookkeepers in your vicinity charge and set appropriate yet profitable rates.
Decide if you want to charge an hourly rate for flexibility or a flat fee for consistency. Research what similar bookkeeping businesses in your area charge.
Pro Tip: If you are in doubt about pricing, then refer to a guide on how to price bookkeeping services.
8. Market Your Bookkeeping Business
It is recommended to first create a website and open accounts on social networks to find new customers. Other ways of networking include probably registering the business within the local areas and also getting into professional associations.
- Networking Events
- Referrals.
- Content Marketing
- Email Marketing
- Community Events
- Free Workshops and Webinars
- Collaborations with Industry Influencers
- Specialized Niche Marketing
- Offering Free Consultations
- Partner with Businesses
Pro Tip: Learn about various strategies on how to market your bookkeeping business.
9. Build a Client Base
When starting your own bookkeeping business, you have to try your best business with all the first customers. Satisfied clients will assist in marketing your business by referring you to other clients.
- Client Onboarding: Come up with an efficient system for client onboarding to create a good first impression.
- Professional Pitches: When engaging with your clients, make use of professional methods such as sending bookkeeping engagement letters, service agreements, etc.
- Testimonials: Ask your clients for testimonials to display on your website and marketing materials.
10. Manage Your Finances
Record your income, your expenses, and taxes so you keep your books and your records in order too. Therefore proper financial management is an essential aspect for the success of your bookkeeping business.
- Expense Tracking: Use your accounting management tool to monitor business expenses in real-time.
- Tax Preparation: Save a part of your income expecting to be taxed and make a team to handle those.
11. Review and Adjust Your Strategy
As your bookkeeping business grows, revisit your business goals every quarter to measure your progress. Stay updated with the current trends in the software and industry. Consider adding new services or targeting a new client base as you gain experience.
Collect feedback from clients to improve your services and address any areas of concern.
If you follow the above steps, you will be sure of beginning to run a profitable bookkeeping business. Make sure, the main aim is to concentrate, give your best to the clients and keep on enhancing our abilities.
You may also be interested in learning how to outsource bookkeeping.
How Can Cone Help You in Your Bookkeeping Business?
Now you have got the steps to start your bookkeeping business, but it's important to choose the proper software to streamline your operations and enhance your marketing efforts.
Cone's Proposal Software and Practice Management Software can be a game-changer for your bookkeeping business.
Cone provides essential tools that simplify your workflow, improve client communication, and boost your overall efficiency.
Pricing
- Essentials: $8 or £6.41/month
- Growth: $11or £8.83/month
- Starter: $5 or 4£ per user/month
- Essentials: $10 or 8£ per user/month
- Growth: $15 or 12£ per user/month
Take The First Step Now
Hope now you’ve got a clear idea on how to start your own bookkeeping business. Perhaps it is right to consider using the right software tool which can include Cone’s Proposal and Practice Management Software.
Cone’s features include proposal customisation, integrated invoicing and a secure client portal, all of which provide you with the tools you need to run your bookkeeping business.
Sign Up Now!
FAQs
1. Is bookkeeping a profitable business?
Yes, it is possible to get good money in a bookkeeping business because of the added focus on the financial management business.
2. How do I start my own bookkeeping business?
When starting the bookkeeping business, there is always a need to write a business plan, register the business and determine the software to use.
3. Can you really make money as a bookkeeper?
However, it should be appreciated that most bookkeepers can fairly well earn their living by providing essential accounting services to various clients.
4. How much should I charge a business for bookkeeping?
When it comes to charges, the price depends on the expert’s experience as well as the services offered; nevertheless, the costs range from $30 per hour, up to $100 hourly rate.
5. What qualifications do I need to be a bookkeeper?
Accounting knowledge and certification will be beneficial to anybody who wants to establish a bookkeeping business.
6. How can I find clients for my bookkeeping business?
There are several ways of getting clients including: networking, social media marketing and offering free services to the clients in a bid to market your service.