How to start a bookkeeping business?
Are you considering beginning your own bookkeeping business? You’ve arrived to the right location. Whether you’re transitioning from a corporate job to self-employment or are a first-time entrepreneur, there are several steps you should take to guarantee your new business succeeds.
You’re ready and excited to take the next step and start your own accounting firm, but where do you start? And, maybe most significantly, how? We are certain that the information provided below will be helpful to anybody considering beginning their own accounting firm and putting the pieces together.
What is it, and who would benefit from using it the most?
Bookkeeping is the practise of manually recording the financial transactions of a company in ledgers or putting them into a computer to keep track of such transactions.
If you are an organised and methodical person who enjoys working with records and gets satisfaction from seeing a set of numbers add up correctly, bookkeeping might be the right career choice for you. According to the ICB, bookkeeping is growing increasingly popular among individuals of all ages.
Bookkeeping may be the initial step toward becoming a qualified accountant for young people who have recently graduated from high school or university.
Bookkeeping can be an excellent method for older persons with years of experience to continue working without having to confront the daily grind.
Many bookkeepers are women looking for a well-paying job they can do from home while raising their children.
Bookkeepers are in charge of an organization’s ledgers, which are the most important accounting documents. Transactions such as revenue and outgoings are recorded and posted to various accounts on a daily basis. With exposure to various elements of the accounting function, a Bookkeeper job description should emphasize the requirement for a good sense of time management and organizational abilities. It can also be a stepping stone to a more senior or specialized accounting career.
Setting up a company’s chart of accounts, opening balances, creditors, debtors, bank and loan accounts, transaction accounts, and so on are all examples of bookkeeping chores. This job is usually done in collaboration with an accountant who is familiar with the company’s demands and structure.
Because there was no expectation of professional accounting or taxation knowledge, bookkeeping tasks were often performed by the owner’s wife (for small trades) or a trusted worker in small businesses, but it’s now considered a profession, particularly because it ties in with heavily regulated areas of our financial lives like superannuation.
Since financial performance information is now reported with the ATO more frequently in the form of BAS‘s for GST reporting, bookkeeping is now considered a profession. Because this information is submitted directly to the ATO, the individual conducting the work must understand what they’re doing and sign off on the accuracy of the data.
Steps on How to Start a Bookkeeping Business
A job in bookkeeping can be a good fit for you if you’re organized, appreciate numbers, and enjoy assisting others. By recording revenue and spending, validating receipts, depositing cash, checks, and other payment types, processing payroll, producing invoices, establishing an annual budget, and keeping track of delinquent accounts, bookkeepers assist businesses in maintaining correct and balanced financials. You can work part-time or full-time from home. And getting your firm off the ground doesn’t need a large investment.
Although purchasing a franchise bookkeeping business is an option, there are compelling reasons to go it alone and start one from scratch. Your knowledge of accounting and accounting software applications is the foundation of a bookkeeping firm. If you’re a virtual assistant, your success will also be determined by how well you get along with others and how productive and cost-effective you are.
If you are a people person who works hard, you may discover that word of mouth marketing with your friends is a good way to get your initial customers.
Rules and regulations
When you operate a company, you could feel as like you’re constantly juggling a lot of different things at once. It is essential that the significance of precise accounting not be neglected, despite the fact that maintaining accurate books may not always be a top priority. It’s possible that you’re preoccupied with introducing a brand-new product or stepping up your marketing campaign, but the moment you stop paying attention to the numbers, the future of your company is put in jeopardy. If you are not diligent with your bookkeeping, reaching your aim of making a profit will be tough, which is the most important factor in determining whether or not your business will be successful.
A person who is thinking about starting their own bookkeeping firm in Australia should be familiar with the requirements that apply to BAS Agents. They meet the requirements to be able to charge for providing services related to business activity statements.
Any bookkeeper who wants to offer BAS services must first become a BAS Agent. In order to become a certified BAS Agent, a book-keeper needs to have a minimum certification of a Certificate IV in Bookkeeping or Accounting as well as 1400 hours of experience working as a book-keeper.
Professional Standards for Bookkeepers
Members of CPA Australia have a duty to act in the public interest. In all of your transactions, you must adhere to the essential values of honesty, objectivity, professional competence, due care, confidentiality, and professional behaviour.
APESB is a nationwide, autonomous organization that was founded in 2006. It establishes the ethical and professional standards that CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ), and the Institute of Public Accountants (IPA) members must follow.
If you are admitted into National Bookkeepers, you must sign the National Bookkeeping Code of Professional Conduct and furnish a Professional Services Agreement for the work you provide for small businesses.
You’ll have a greater knowledge of what it takes to run a successful bookkeeping firm without incurring the expenditures of a franchise.
These professional standards are also important for our licensees, as it is expected that their invoices will be paid on time and that they will be well-regarded as small business contractors
Training and Quality
When you join National Bookkeeping, you’ll go through our training and orientation programs to ensure that you’re up to speed on accounting software and the business.
Your membership gives you access to ongoing education on a variety of topics related to bookkeeping, accounting, and taxation, as well as business and marketing assistance and introductions to practicing bookkeepers and BAS Agents.
Hundreds of different RTOs (Registered Training Organisations) provide bookkeeping certificates in Australia, and these abilities are crucial for all bookkeepers to stay current in their skills and legislation. Still, they want to expand the services they provide and the rates they get as a result.
The Small Business StartUp and Admin Course is presented to new National Bookkeeping Licencees, and it includes a bookkeeping business plan produced by our BAS Agent Jacci to utilize as a template in their studies. This training not only assists licensees in running their own businesses effectively, but it also allows them to pass on their skills to their small company clients.
We believe in providing education to both our members and their clients, therefore as a member, you’ll have access to digital marketing and course material support, as well as special discounts for your clients.
Your Bookkeeping Business Plan
Management of spending, income, tax returns, and payroll are among the professional activities required by the accounting firm. To run a profitable accounting firm, you’ll need to plan ahead for all of these services and more. So, what are the most significant requirements to consider while creating a plan?
A business strategy is made up of several distinct phases. The procedures and features needed to establish a business plan for your new accounting firm are outlined here.
If you want to advance as a bookkeeper and be more helpful to your clients, you must prioritize learning about the accounting profession as well as small business technologies and expectations.
Examine the contents of the current business plan (prepared by our Registered BAS Agent), make any required adjustments to fit your own circumstances and goals, and then implement it in your own corporation to achieve success.
Sales and Marketing for Bookkeepers
Because the two positions are nearly irreconcilable, many bookkeepers fear the possibility of selling. Even yet, just like any other business, marketing and selling your bookkeeping services is critical.
The internet has changed the way businesses use accounting software and find bookkeepers and other service providers to help them manage and expand their operations.
We provide bespoke support packages if you require more targeted help marketing your services or closing sales with new clients.
Your regional licensee manager is committed to helping you develop all of your business abilities, including the confidence to establish a successful sales and marketing strategy to expand your company. You don’t have to be harsh and brassy to promote your own bookkeeping services; simply be yourself. However, the more you learn about the complexities of selling, the simpler it will be to incorporate it into your daily encounters.
Directory Listing and Exposure
Licensees receive a legal package (including template agreements), a unique directory listing, and a phone number to demonstrate the need for their services.
The majority of your learning will be completed in the first year, so your ongoing fees will be minimal.
A great element of a National Bookkeeping license is that it is built on upskilling and being rewarded in your early years of business, and then providing a framework where all members profit from group-level marketing.
Starting a Bookkeeping Business: Pros and Cons
The Pros of Starting a Bookkeeping Business
If you possess those qualities, consider the following advantages of beginning an accounting business:
- An accounting firm has very low startup costs.
- For greater marketability, you can specialize in one accounting program.
- It’s consistent work that usually happens on a regular basis.
- You can work from anywhere and reach a larger audience.
- There are no official prerequisites for credentials or training (but becoming certified is always a good idea).
The Cons of Starting a Bookkeeping Business
If you establish an accounting business, you may face the following difficulties:
- There could be serious liability concerns.
- You must take steps to guarantee that all client information is maintained safely.
- Purchasing and updating multiple accounting software can be costly.
- You must be familiar with technology in order to gain access to a client’s computer if necessary.
FAQs in starting a bookkeeping business
Nevertheless, there are a few inquiries that ought to be running through your head right now. And you absolutely need to be in possession of the solutions before delving into the bookkeeping company.
How Soon Can I Expect To See Results From My Attempt To Start My Own Bookkeeping Business?
The bookkeeping business training programme known as Bookkeeper Launch is intended to be finished in ten weeks (10) of full-time study. During the training, some students even land their very first customer for their businesses!
While Bookkeeper Launch is designed to assist you in starting a bookkeeping firm in ten weeks, the final decision is yours. If you can commit your full focus to your bookkeeping business, it will take much less time to grow.
Bookkeeping is a straightforward business. However, this does not imply that it is simple. Nothing worthwhile in life comes easily. Again, it’s a short-term cost for a long-term reward.
The important takeaway is that you should be able to launch your business within ten weeks. You have complete control over the situation, my good friend! You are entirely in charge of your own life and decisions.
How Much Do Start-Up Costs Are?
Starting a bookkeeping firm is much less expensive than you might think.
Additionally, keep in mind that the business that brings in the greatest money is bookkeeping. Due to the fact that this is an online bookkeeping service, you will require the following:
- You will require a computer with high-speed internet connectivity and bookkeeping software that is hosted in the cloud in order to launch a bookkeeping business (and run it.)
In addition to these three fundamental components, you should also prepare for the following initial expenses when beginning a bookkeeping business:
- company cards (even though you hand them out on rare occasions), Office supplies for $20 (ask Dwight Schrute for a discount, although they could cost $100)
- $50 for a domain name and hosting account to get started.
- Around $100 for a do-it-yourself website…
- It’s primarily a matter of your time and work. This estimate includes stock photographs as well as the platform itself, such as Wix or Square Space. If you require more freedom, you may alternatively utilize WordPress.
- Xero certification is the best way to demonstrate to your customers that you are an expert book-keeper. The price is $249. On the other hand, I am able to get that fee waived. This topic will be elaborated on at a later time.
- When purchasing errors and omissions insurance, a deposit in the amount of $200 is necessary. What exactly is meant by the term “errors and omissions insurance”? This is your saviour in the event that something goes wrong, you make a mistake, or you forget to do something. Just as with any other type of insurance, you cross your fingers and hope you’ll never have to use it. Nevertheless, you really want to purchase this insurance just in case something happens. You shouldn’t even think about starting an accounting business if you don’t have it!
- Computer security software (such as disk encryption and password management)…
- This cost around $185.
- Creating a bookkeeping organization, obtaining a company license, and paying some additional often encountered taxes. This varies a LOT from state to state and county to county. But I’m going to set the bar at $300. You don’t have to form a corporation or a limited liability company to start your business (LLC). However, I emphasize the significance of obtaining it, just as I do with errors and omissions insurance.
There are various flavours to choose from when forming a corporate corporation.
So, assuming my math is correct, your expected launch costs are around $1,404.
If you’re a frugal person, I’m sure you can save some money. You can also put off acquiring some of the products I mentioned above.
The majority of businesses spend tens of thousands of dollars to start.
But not your accounting firm! For little than $1,500, you can get started in the world’s most profitable business.
What Kind Of Equipment, Technologies, And Certifications Am I Going To Need To Get Started In The Bookkeeping Business?
Every artisan must have their own collection of tools. Why?
To be of assistance to him in doing the project to the best of his abilities in the shortest period of time possible in order to ensure the delivery of a finished product of a high quality.
There is a vital mentality you must acquire before diving into your research of the EXACT tools, technology, and professional certification you need to start a bookkeeping firm.
The profession of bookkeeping is one that is regarded highly and has a long history. Even though there are no longer any laws or regulations in the United States that need you to get a licence, you are still obligated to comply with the following reality:
“AS A BOOKKEEPER, I AM A PROFESSIONAL. AS A BOOKKEEPING PROFESSIONAL, I MUST CONTINUE TO DEVELOP MY CHOSEN CRAFT AND EACH DAY STRIVE TO BECOME BETTER THAN THE PREVIOUS.”
In order to preserve this professional perspective, let us now shift our attention to the particular resources, technologies, and credentials that are necessary for you.
In the part titled “how much does it cost to start,” which can be found above, we discussed some of the specific pieces of technology and resources that would be necessary for you to launch a bookkeeping business.
Right now, I’d want to talk about the most critical thing you’ll need: a good bookkeeping program.
Hammers are the most common instrument used by carpenters. As an alternative, there is the nail gun.
As a skilled book-keeper, the bookkeeping programme should be your primary tool of choice. (From this point forwards, I will refer to it as your accounting app.)
To begin, I’d want to provide some prerequisites for ANY software you use to provide bookkeeping services to your clients:
- Through the use of the cloud, you will operate a bookkeeping business virtually. This means that you are able to provide service to your consumers regardless of where either you or they are located. Under no circumstances should you depend on location-based applications. This limits the extent to which you can help other people.
- You are dealing with a large amount of sensitive financial data, and as a result, you require protection on the level of the military. As a consequence of this, it is only logical that the cloud-based bookkeeping tools that you use will protect the information in question.
Now that you are familiar with the criteria that are used to evaluate bookkeeping and peripheral applications, let’s have a conversation about the workhorse application, which is one of my absolute favourites.
Why Do Small Businesses Need A Bookkeeper If There Are Such Fantastic Cloud-based Bookkeeping Apps Available?
Yes, bookkeeping software for small businesses is fantastic. These programs handle the daily data entering and number crunching, but that’s all they do.
The bookkeeping apps on your phone are not a substitute for you. You are an exceptional person that helps your clients build their businesses by using the financial transaction reporting provided by bookkeeping software.
You and your customer come out ahead in this scenario, so everyone is happy. They are provided with superior service, and you increase your financial gain.
Bookkeeping apps take care of a lot of the tedious labour that bookkeepers had to do even five years ago, allowing you to focus on providing premium service at premium rates.
You can do the following with bookkeeping software:
- If you can improve your efficiency, you’ll be able to serve more customers in less time, which will nett you more income with less effort on your part.
- Gain greater financial success in a shorter amount of time.
- Keep a healthy balance between your career and personal life.
- If you want to make a solid living as a book-keeper and become one of the best in the business, you’ll need to have skills beyond merely being able to crunch numbers.
“People won’t care how much you know until they know how much you care,” stated the late Zig Ziglar, one of the most brilliant men on motivation and human connections.
That level of attention cannot be replicated by a machine or an app at any time. As an outstanding book-keeper, the decision ultimately rests with you.
Keep in mind that the most significant quality in a person is their personability and their kindness.
The bookkeeping software can run the numbers, but only an experienced book-keeper can read the information and translate it into language that a customer can understand. And do so in a personal and sensitive manner.
How do I start a bookkeeping business and bring in clients so that I may start making money right away?
Now that we’ve gone over some ways to spend money, let’s talk about some ways to really MAKE money…
Because your bookkeeping business is not much more than a pastime if you do not have any clients.
Clients can be acquired in a variety of methods. What works for you may not work for someone else, but there is ONE killer method that works for everyone!
It is the strategy that is both the easiest and the quickest to use in order to gain fantastic customers. The best aspect is that it can be had for very little cost.
Make contact with others! Please inform your family, friends, acquaintances, business owners, and anybody else you know. You won’t believe how productive this is!
What Accounting And Bookkeeping Services Can I Provide To Small Business Owners?
When it comes to the mountain of paperwork that comes along with operating a small business, you need a book-keeper who can manage more than just the paperwork. When it comes to one of the most important components of your company, funding, you want someone on your side.
Bookkeeping services guarantee that your financial records are kept up to date, that payments and receipts are made on time, and that your submissions are complete cheval. They should also send you a monthly report that explains what it implies for your company. This service should take up very little of your time.
The monthly preparation of the three main financial statements is at the heart of small business accounting:
- a financial statement
- Statement of Income
- Cash Flow Statement
You can also provide add-on services in addition to the preparation of these three basic financial statements, such as:
- Management of accounts payable
- Management of accounts receivable
- Prepare tax returns and paperwork for self-employment.
- Make invoices.
- Payroll processing
- Additional financial reports, such as a budget
- assisting in the tracking of long-term assets such as machinery and equipment
To provide these services to your clients, you must understand accounting and bookkeeping fundamentals, such as:
- Double-entry bookkeeping (try to see this as a straightforward equation)
- Preparing the general ledger (which is made much simpler by using software that is accessible online)
- How should financial transactions be classified and recorded?
But all of these things are teachable!
A mix of education, certification, and mastery of the job tools is an excellent foundation for getting to the point where you’re ready to start your own firm. Most clients will want to see that you have some experience, as well as a recommendation from other business owners. Furthermore, a strong motivation for starting a bookkeeping service is a desire to assist others in successfully running their businesses.
You don’t need accounting credentials, but having some understanding can’t hurt, especially if you’re the go-between for the business owner and their accountant.