If one enjoys crunching numbers, working with spreadsheets, and organizing financial data meticulously, pursuing a career in accounting or bookkeeping can be a worthwhile option. One can start by enrolling in a degree program or certification course and then getting some hands-on experience. Over time, they can use the acquired skills to start a business or freelancing venture. At that stage, all one needs are the qualifications, experience, and strategies to attract clients.
Necessary resources
Starting a bookkeeping business requires investing time and money into getting resources that can help ensure the venture’s success.
1. Training and certification
Bookkeeping is a craft that requires complete accuracy, which usually comes from relevant experience and knowledge. For those with little to no experience, background, formal training, or expertise in the field, taking a few classes can help them master skills like financial record keeping. The right courses can help people become more familiar with current accounting regulations. They may also come with a training component, which could be followed by hands-on bookkeeping work experience. Apart from being great learning opportunities, these courses can also provide a certificate that tells future clients that one is well-versed in bookkeeping. One should also try to get some on-the-job work experience under their belt to boost their profile. These things give one some credibility when trying to start a bookkeeping business.
2. Equipment and software
To start a bookkeeping business, one must consider investing in a few tools that will help with daily tasks. A laptop and printer should be enough in the initial phases. Later, to improve organization, one will need to get scanners to handle multiple receipts, a filing cabinet, a comfortable chair, and a desk. An office phone and stable internet connection can help one stay connected with clients.
Additionally, investing in accounting software like QuickBooks can make things easier. Bookkeeping involves various tasks, like tracking clients’ income and expenses, verifying receipts, collating payroll-related data, checking for overdue payments, and more. The right tool can easily sort through data and simplify recordkeeping. Starting a bookkeeping business with the help of QuickBooks also helps relieve some of the burden of carrying out repetitive manual tasks like data entry. The software can also help one maintain balanced and accurate financial data, lowering the risk of human error.
QuickBooks can also capture and organize receipts with just a few clicks, allowing one to manage expenses effortlessly. The tool can additionally assist one with figuring out the best way to maximize tax deductions.
3. Errors and omissions insurance
In bookkeeping, the financial data of clients is highly confidential and sensitive. Any mistakes in managing this data can land clients in trouble with tax authorities and business stakeholders. In such cases, clients are entitled to legal action against bookkeepers. To prepare for such events, one should invest in errors and omissions insurance, which safeguards bookkeepers and their assets from the financial obligations associated with litigation. The annual premiums of these policies can be anywhere between $300 and $1,000. In addition to insurance, when starting a bookkeeping business, one can create an emergency fund to cover legal fees and other expenses incurred due to unforeseen situations.
In addition to these resources, bookkeeping businesses need a few things to sustain their operations—employees, a business plan that outlines organizational structure and goals, a unique value proposition, a niche, a target market, and, finally, a unique yet relevant business name. Later, to help the business grow, one can invest in software-based accounting tools, a marketing plan, and efforts to encourage continued education and learning.
How to start a virtual bookkeeping business
1. Start with freelancing
If trying to start a bookkeeping business with no experience, it is important to get some hands-on experience to figure out common problem areas, number of tasks, and duration of each task, among other things. This is where freelancing can help. Till one finds other people, resources, and office space to set up a bookkeeping organization, one can freelance and take on clients. This will help one get some money and experience. Additionally, one can later try to retain these clients for the new business.
Once more work starts coming in, and one has the money and resources to bring other bookkeepers on board, then they can set up the organization. Over time, if their work is solid and credible, then more clients will be interested in using their services.
2. Register the business
To officially start the bookkeeping business, one has to register it with the chosen name. For this step, reaching out to state authorities and understanding the registration process is crucial. Soon after registration, one should purchase insurance policies to protect the newly set up organization.
3. Figure out other arrangements
In the initial stages, one can choose between virtual and in-office setups. Virtual bookkeeping can help one save some money that they would have otherwise spent on office equipment and supplies. This is also the time to set up a website, client database management system, and other infrastructure for smooth operations.
If still unsure about how to start a bookkeeping business, one can speak to bookkeepers or contact consulting services that will do the necessary research for them.