A bookkeeping business includes managing expenses and income, processing payroll, and making tax returns for different clients. Making a business plan and learning how to attract new clients are a few examples of what you must do to get started. If you are starting a bookkeeping business just to earn some extra money, then you may get away with skipping a few steps. Listed below are some of the important tips to start a bookkeeping business.
Tips to Start a Bookkeeping Business
Be a certified bookkeeper
One of the fastest and easiest ways to attain credibility with potential customers is to prove that you have the qualifications required for doing a bookkeeping job. If you are a CPA, then you already have shown that you have the knowledge and necessary skills to perform the duties of a bookkeeper, and you can move on to the second step.
However, if you a formal education in the bookkeeping or accounting field if you have worked as a bookkeeper in the past, then you must get certified before starting a bookkeeping business. There is 2 top professional bookkeeper company that you must certify with:
- American Institute of Professional Bookkeepers- To become an AIPB-certified professional, you must meet the 3,000-hour working experience requirements and pass the certification exam successfully. Once you are certified, you can add “Certified Bookkeeper” behind your name and display this on your business cards and your resume too. This will set you apart from others. This certification is the standard if you do not have any official education in the accounting and bookkeeping sector.
- National Association of Certified Public Bookkeepers- To earn certification through the National Association of Certified Public Bookkeeper, you must pass an exam and submit the proof that you have earned as Associate’s or Bachelor’s degree in the Accounting field. Once you become certified, you attain the credential of a Certified Professional Bookkeeper (CPB). You can put these letters after your name on business cards, resumes, and other materials to show your accomplishments to future clients and employers. In addition to becoming a certified bookkeeper, you must also consider starting a bookkeeping business with QuickBooks and other software.
Create a bookkeeping business plan
Unless this is a part-time option for you, creating a bookkeeping business plan is something that everyone must do before they start a business. While a business plan can be used for obtaining money for your business, the value of going through the exercise of writing a business plan is all about the procedure. During the bookkeeping business plan writing process, you must think about every single aspect of your business, like what are the products and services that you are planning to sell, how are you planning to market these products and services, and who your customers are. You must also create a financial plan that must include a 12-month gain and deficit projection, projected Cash Flow, and a Projected Balance Sheet.
Here are a few items that must be included in every business plan:
- Executive summary
- Cover Page
- Overview of the company
- Competitive Analysis
- Start-up expenses
- Marketing Plan
- Financial Projections
Integrate your bookkeeping business
Just like starting any business, there are many administrative tasks that must be done before you start providing services to your customers. This step is important as it proves your business as a legitimate one. It also assists to restrict your personal liabilities, if your organization is sued by any chance, the only asset that could be taken away are business assets, not just your personal assets like your personal bank account or home. Whether you are doing this full-time or part-time, you must not skip this step.
Here is a checklist of what you must do to establish your business at the state, federal, and local levels:
- Choose a business name- Naming your bookkeeping business can be both stressful and fun. The name of your business must convey your brand, as that is what a potential client will notice when they come to you for the first consultation. You must ensure that your business name says what you do exactly. You must not focus on cute names, rather try to choose names that tell what you do.
- Choose a business structure- Generally, there are four common bookkeeping business structures. These are a partnership, sole proprietorship, limited liability company, and corporation. The business structure that you select will determine your personal liabilities if the company is ever sued by any chance in the future, your capability to raise money, and your tax liabilities.
Set up business operations for Bookkeeping business
Now that you have integrated your business, you can begin setting up operations like getting the correct insurance and opening a different business checking account. It is significant to differentiate your business operations from your personal money to take full benefits of the liability security offered to you during the incorporation procedure.
Appoint an answering service- As a one-person venture, you might find it difficult to get back to customers right away, mainly during the tax season. Sending prospective client’s voicemail when they require your services can help your business when things start slowing down.
Setting up a Business Bank Account- One of the most significant things that you can do is to divide your business assets from your personal money. While many believe they should wait until the business starts to generate money, it is not right. It is much simpler to establish a business bank account at this time before the money starts coming in.
Another advantage of keeping your business assets and personal finances separate is it supports the restricted liability status. If you commingle your personal and business costs, then you can miss the protection of your personal money as there will be no unique method to distinguish between personal and business assets.
Create a business email address- If you plan to give your office space for lease, then of course your mailing address will be wherever the office is situated. However, if you plan to use a home office, you must get a business mailing address as you do not want to use your home address anywhere.
Choose the right accounting software- Deciding which software to use for managing the different aspects of your business can be a tiring task. To start with, here is a list of the popular areas of your business for which you must decide what software tools to utilize:
Accounting/Bookkeeping software
When you plan to start a bookkeeping business, at first, you must decide which accounting software to use for your business. As you know, there are plenty of options to select from. However, experts recommend starting a bookkeeping business with QuickBooks. Apart from the fact that QuickBooks is the top small business accounting software used by small businesses, you can sign up for QuickBooks Online Accountant for free of cost. You will also have access to different video tutorials and training guides. These will help you to prepare for the QuickBooks ProAdvisor certification examination.
Fund your bookkeeping business
One of the most important tips to start a bookkeeping business is to plan your finances. By the time you complete your business plan, you will get an idea of what your estimated start-up expenses will be. Generally, the start-up costs for a bookkeeping business can be allowed if you work out of a home office as opposed to leasing an office space.
Market your bookkeeping business
This is one of the most significant tips to start a bookkeeping business. Whether you are starting this business as a part-time or a full-time business, you must have a customized website for your business. Your website must include all important details of your business like the name, products, and services, etc.
The bottom line is simple. If you want to earn money by sitting at home, then consider starting a home business. You will enjoy doing it!