How to start a bookkeeping business from home?
To begin with, when you start a bookkeeping business, this can be as simple as working for yourself a few hours each week from your own home.
For this kind of bookkeeper, it might mean you transition from a full-time job and begin prospecting and marketing your services to find clients. Slowly you begin invoicing people for your services rather than receiving a paycheque.
Businesses love this arrangement because it gives them flexibility and allows them to “expense” your services rather than put you on their payroll.
It’s important to understand your capabilities as well as your goals because this helps you understand who your ideal client is — yes, you get to choose.
So here are some tips for building a successful home-based bookkeeping business.
Understand the job of a bookkeeper
There’s more to the job than just recording financial transactions. As the business owner, you’ll have to:
- Pay bills on time on behalf of the company you’re working for.
- Keep track of money that’s going in and out of the company.
- Make sure the company’s financial records are accurate and up-to-date.
- Make sure everyone gets paid regularly.
- Perform bank reconciliations.
- Create financial reports.
- Print cheques.
- Produce invoices.
- Work with various accounting and payroll systems.
- Maintain inventory records.
- Promote your business online.
Learn bookkeeping skills
Here are the skills you’ll need as a bookkeeper:
- Strong analytical and problem-solving skills.
- Numerical accuracy and diligence.
- Data entry skills.
- Good communication.
- Good organisation skills.
- Attention to detail.
- Be disciplined, patient and dedicated.
- Be able to work both independently and in a team.
- You can learn bookkeeping skills by undertaking a Bookkeeping course.
Know the pros and cons of being a bookkeeper
Knowing the pros and cons can help you prepare for the highs and lows of running a bookkeeping business.
- You can set your schedule.
- You can decide how much you get paid.
- You can choose who you work with.
- You can work with people all over the world.
- There could be significant liability issues.
- You need to take measures to ensure all client data is kept secure.
- It could be expensive to purchase and update various accounting software.
Be aware of the legal requirements related to being a bookkeeper.
As a bookkeeper, your main duty is to record all of a company’s financial transactions to help them prepare their Business Activity Statement (BAS). The BAS is a tax report that companies send to the Australian Taxation Office during the year.
If you want to provide BAS services for a fee, you must be registered as a BAS Agent with the Tax Practitioners Board. To become a registered BAS Agent, you’ll need to have the following:
- Professional Indemnity Insurance with standalone creditable policies.
- A qualification of at least Certificate IV in Bookkeeping, like the ICI Diploma of Bookkeeping.
- 1,400 hours of work experience supervised by a BAS Agent.
- Fifteen hours of continuing education every year.
Design your business model
Understanding why you want to be a bookkeeper and why you want to work with small business is essential. This will form the foundation of your business model. Ask yourself:
- Who do I want to serve?
- What solutions am I going to provide?
- How am I going to deliver these solutions?
Consider your end goal: are you building a business to sell on? How many employees do you want? Do you want your business to go global?
Knowing where you eventually want to end up is helpful when you begin planning. It will guide how you do business, whether you want to hire anyone, what kind of clients you want to take on, and how hard you’ll chase new business.
It’s also helpful to develop a contingency plan in case you’re unable to work for a period of time. Whether this is due to illness or a family matter, it’s incredibly helpful for your brand if you’re able to offer your clients a suitable alternative.
Getting a Professional Indemnity Insurance (PII) gives professional bookkeepers a ‘safety net’ in case mistakes happen. This insurance indemnifies bookkeepers from losses suffered by their clients or other third parties due to negligence, mistakes, error, or failure on the bookkeeper’s part.
As the Tax Practitioners Board website says, the PII is “a consumer protection mechanism.” It will provide compensation for clients if they suffer any losses due to an “act, error, or omission as a result of the BAS services” provided by a BAS agent. It also pays the costs of defending a legal case a client makes against you and your business.
Having and maintaining a PII is required for all registered BAS agents; plus, it must meet the requirements of the TPB. Failure to maintain one will result in the termination of your BAS agent registration.
Getting set up
You don’t need a lot of things to get started. A computer, a mobile phone, and an Internet connection are the three main things you need. Along with the right software and apps, you can work with people around the world wherever you are.
There is two software you’ll need as a bookkeeper. The first one is an online accounting software. This will allow you to look at accounts at the same time as your client, so you can talk over the phone and reduce the number of meetings you have. The software also allows automatic data entry, bank reconciliation, and payroll. The second piece of software is a practice management software. This will allow you to manage workflows and get your business in order.
With the right software and apps, it’s easy to work with people wherever you are in the world.
You don’t need a huge amount of infrastructure to get started. Get a computer, a mobile and then get online.
Online accounting software will let you look at accounts at the same time as your client. This means you can talk through their questions over the phone, reducing the number of meetings you have.
Smart accounting software will also allow automatic data entry, daily bank reconciliation and payroll.
You should also consider practice management software. These tools enable you to manage workflows and get your business in order. They come free with some accounting software and are getting smarter all the time.
Shop around for your software, and don’t just look for in-product features. If the provider has a partner program, it will help you grow your business.
Accounting software, Addons & Integrations for starting your bookkeeping business
When you start a bookkeeping business, even if you’re working for yourself a few hours a week, your clients will expect you to be able to recommend software to them and help them use it for their business.
Your clients are becoming aware of receipt scanning, automated data capture and coding software like Receipt Bank as well as bank feeds that help them reduce their bookkeeping costs and increase their accuracy. Hence, it’s important to have a good knowledge of these apps.
Receipt capture software will replace some of the time you would normally charge for, but your clients will appreciate it, and you’ll be able to earn money doing more important tasks for your clients.
It’s also a good idea to automate the running of your own business with Practice Management software. This software will make it faster and easier to provide written quotes to clients, enable them to accept the quote electronically and then set up automatic payments. These steps alone will make running your business streamlined and less stressful – particularly chasing up payment for your services.
MYOB AccountRight, MYOB Essentials & Xero
Many existing businesses use MYOB, so it’s always a good idea to have this software knowledge to help established businesses with their bookkeeping needs.
MYOB developed a new cloud accounting program called MYOB Essentials which is great for smaller businesses or those who choose to stay with MYOB but want the flexibility of being in the cloud so they can do their accounting from anywhere. Many businesses choose cloud accounting programs like Xero because you can use them from anywhere, they’re automatically backed up and you can have multiple people working on the file at the same time.
Intuit QuickBooks Online
The other well-known cloud accounting software is Intuit’s QuickBooks Online. This company is massive globally and their software is popular in Australia too, so it is a good cheaper alternative to Xero.
Define Your Target Market
Do you want to serve real estate companies or construction companies? By specialising in an industry, you can target your marketing to just one audience.
Once you know who your ideal client is, you can then put together specific solutions for them. Try combining relevant services into packages and offering them to your client so they can pick the service level they want. Then you can work together to customise the package to their needs.
Accounts payable, bank reconciliations, inventory management, tax returns? What are you going to offer as in your newly started bookkeeping business?
Maybe you’ll focus on serving a niche like real estate or construction? By positioning yourself as a specialist, you’ll be able to target your marketing and talk specifically to one audience.
It’s tempting to offer everything in an attempt to attract prospective clients. But if you aren’t able to deliver on what you promise, you could get yourself into trouble. Start small and don’t over-promise on what you’re able to do.
Once you’ve identified your ideal client, then you can put specific solutions together for them.
Combine relevant services into packages and offer them to your client that way. This allows them to choose the general service level they want. You can then work together to customise the package to their specific needs.
Present the packages in person or on a call so that you can walk your clients through them. Once you’ve agreed on a package of services, set the fees upfront. Don’t advertise fees on your website – remember it’s about pricing the client and not the service.
Offer your clients multiple convenient payment options, such as credit card, GoCardless, Stripe, or electronic transfer.
Build a digital presence
Most businesses will search for a bookkeeper online but even if you intend to go to networking events and build a referral network the people you meet will expect to learn more about you online, so a website is important.
Think of your website and digital presence as your shop front. It should communicate clearly who you are and what you do.
WordPress enables you to create a professional website using thousands of professional themes (like templates). It also enables you to create website pages easily and modify them when you want to.
Your bookkeeping website should be personal and show information your clients look for including your qualifications and experience, your services and your contact details. It’s easy to include images and even Youtube videos and provide links to your social media profiles so they can see what you’ve been up to.
You can market your business by creating a website and social media accounts. They should communicate clearly who you are and what you do.
To attract potential clients, your website must show your passions and personality and include information you want people to see. You need to make potential clients want to contact you over another bookkeeper.
On the other hand, social media sites like Facebook, Twitter, and LinkedIn can also help you reach potential clients. They should also clearly outline the services you offer.
Your website should be clean, uncluttered and informative. Think about the kind of information you’d want to see and consider what you’d leave out.
Make your website personal. Show your passions and personality. Put yourself in the shoes of a prospective client. Why would they want to contact you over another bookkeeper?
A good social media presence is as important as a good website. Facebook, Twitter and LinkedIn can all help you reach prospective clients. Set up a Facebook business page that clearly outlines the services you offer.
Networking and Referrals
If you want to know how to start a bookkeeping business, be prepared to hit the streets to acquire your first few clients.
To do that, there’s no better way than attending local networking events.
It’s just a matter of finding the events your target market hangs out at and heading there with some business cards.
Networking is one of the cheapest ways to meet other business people and build a referral network. You have to be patient and understand that everyone attending these events are looking for new clients too, so be sure to ask about their needs and meet many different people.
You’ll need business cards and must make sure you collect them from people you meet so you can introduce yourself via email after the event.
In the beginning, you should have enough time on your hands to head to several of these a week.
Collect business cards from everyone you meet. The next day, hop on to LinkedIn and connect with everyone you met and send a personalised message.
You’re now starting to grow your network, and some of these contacts will inevitably turn to customers.
Confidence & Motivation
Once you’ve established your goal, digital marketing and business plan, it’s important to keep motivated each week to achieve your goals.
Use your networking and digital marketing experiences to learn from and understand that you may not see immediate results from the work you do today.
Keep an eye on your business plan and make a note of what works and what doesn’t work in your attempts to get new clients. Any mistakes you make shouldn’t lower your confidence but increase your knowledge about what you should be doing instead.
When you come across a brick wall or feel like you need a break, take one. Also, connect with people in your network and speak with a mentor or regional manager to help you refocus.
Your success will sometimes depend upon what your competitors are doing. It can also depend on the time of year, and changes in technology so make sure you keep reading and researching to keep abreast of the latest regulation changes and improvements in technology – your clients might ask for your opinion.
The more aware you are of your circumstances, the more you will be able to adapt to changes. You may find that you are much better, more accurate and more productive in the way that you work that it saves your clients hundreds of dollars per month.
While you’ll set yourself up to succeed, you need to be willing to admit when things go wrong. Learn from your mistakes, adapt your plans, and change them if required.
Open yourself up to new ways of working, too. Take advantage of apps that can:
- give your practice an edge
- make business easier for your clients
Take advantage of courses and training to learn new skills and expand your service offering. Don’t be afraid to increase fees as your capabilities grow.
As you establish a client base and get more comfortable with your bookkeeping business, continue your learning and consider offering more services. Beyond simple accounting, you could offer packages that include doing payroll for your clients, handling their business tax filing, helping new businesses with financial planning and loan packages – the list of how you can add value to your business goes on. And any time you add service is a great opportunity at which to re-evaluate your pricing structure and sell your clients on those new packages! Developing a more robust set of offerings is also a solid way to attract new clients.
Follow a proven system. Don’t try and blaze your trail. There are systems out there that work. Find one that is a good fit for you and stick to it.