All types of businesses require bookkeeping services to maintain their financial records. If you love numbers and want to start your own business, one of the best options for you is the bookkeeping business. You can offer bookkeeping services to your clients both in-person and remotely. If you want to work from your home, the latter option might seem better for you.
The first part of this article consists of a general overview of a bookkeeping business. Next, we will give a description of what bookkeeping consists of. Hence, if you are on the lookout to start your own bookkeeping business, you will need to read through to the end of the article. This article will cover all aspects like legal matters, planning, marketing, finance, clients, as well as bookkeeping skills.
Bookkeeping Services: An Overview
A bookkeeper is involved in bookkeeping, and every business hires bookkeepers at some point.
According to Nedwallet,
“A bookkeeper is an instrumental part of any business operation. A company hires a bookkeeper to manage and organize its finances, including detailing and categorizing all transactions. They help small-business owners get a handle on their cash flow — one of the most important barometers for a healthy business. ”
However, the process of bookkeeping is different from accounting, as bookkeepers cannot file taxes or perform audits like accountants who have public certification. However, an accountant, on the other hand, can perform the job of a bookkeeper.
Furthermore, it is also not important for bookkeepers to have a degree in accounting or any related field. However, to earn a skill, bookkeepers can get certifications through training programs. Furthermore, bookkeepers can also acquire experiences from amateur bookkeeping jobs to prepare financial statements like profit and loss statements and balance sheets.
What Does Bookkeeping Include?
According to the Forbes Advisor,
“In addition to being good with finances and accounting software, operating a successful bookkeeping business requires staying up-to-date on accounting software technology trends, marketing your business, managing your own business, and maintaining positive relationships with your clients.”
Bookkeeping is a job that is always in demand, even though the nature of a business might change with time. Bookkeeping is always needed if the business wants to keep records of all financial transactions as well as various assets and liabilities.
The following are the major works associated with bookkeeping:
- The bookkeeper needs to manage the finances of a business through manual accounting or an accounting software system.
- A bookkeeper manages accounts payable and accounts receivable.
- Bookkeepers also help businesses with an overview of their finances to ensure that they understand their habits.
- A bookkeeper also generates financial statements.
How To Start Bookkeeping Services? – Major Steps
According to Investopedia,
“Bookkeeping has the potential to be a profitable business if you’re able to maintain a solid roster of clients who are willing to pay competitive rates for your services. A typically remote bookkeeper’s salary is just over $55,000 a year, but it’s possible to make much more than that, depending on your clientele and the rates you charge.”
The following are the major steps that you will need to take if you want to start a bookkeeping business:
1. Make Sure The Business Complies With Legal Requirements
If you want to start a bookkeeping business, the legal requirements are similar to opening any other type of business. Here are the matters you need to ensure:
- Choose the structure of your business (for example, sole proprietorship, LLC, etc.)
- Choose a unique name for your business and check the name on the state website.
- Register your business with state agencies.
- Acquire an EIN from the federal government as well as state identification numbers.
- Apply for all the necessary licenses and permits
- Open a bank account for your business
- Insure your business along with liability coverage.
2. Get Necessary Bookkeeping Skills
You need to have a good idea of accounting and bookkeeping practices. Before you launch your business, you will need to first complete a training program. However, if you feel confident enough through your bookkeeping experiences, you can give it a go.
Nevertheless, if you want to acquire some bookkeeping skills, consider getting:
- A bookkeeping certification
- A tax certification
- A certification in using accounting software systems.
3. Creating A Plan For The Bookkeeping Services
To launch your business and ensure its growth, you will need to create a business plan. To create a business plan, you will need to consider various key elements. Make sure the following things are present in a business plan:
- Executive summary
- Company description
- Analysis of the market
- Business organization and management
- The types of services the business offers or is planning to offer
- Marketing strategies and techniques
- Financial projection for the business, which consists of how much revenue and profit you expect from it.
4. Choosing A Marketing Strategy
Any business, if it wants to grow, needs to choose a marketing strategy to operate in the marketplace and bring in new customers. Having your presence on major digital platforms, as well as on social media platforms, is one of the major aspects you need to consider.
5. Financial Management
Being a bookkeeper, you will also need to ensure that you track your income and expenses as well. Keeping track of your cash flow is one of the most essential aspects of any business.
6. Dealing With Clients
One of the easiest ways to look for clients is through various bookkeeping websites, as well as freelance websites like Upwork and Fiverr. This is the place you can start and grow along the way.
Hope this article was helpful for you in getting a better idea of how to start a bookkeeping business if you want to offer bookkeeping services to clients (businesses and individuals). One of the best things is that you do not need to have a degree in accounting to start this business. However, having a certification can help you in various cases in the long run.
Before you start your business, you will need to choose the structure of your business and register your business with the state. To hire employees for your business, you will also need to get insurance for workers’ compensation. Do you have any more ideas to offer apart from the ones discussed above? Share them with us in the comments section below.