How To Start A Virtual Bookkeeping Business In 5 Simple Steps

How To Start A Virtual Bookkeeping Business In 5 Simple Steps

how to start a virtual bookkeeping business in 5 simple steps

If your clients will be sending you things such as receipts or statements, you might want to consider the tool that you’ll use to share files. A popular option is Dropbox, in which you can create a shared folder that both you and your clients have access to. There are two pieces of the business plan that deserve a little extra consideration. All of those things have helped me make money from my blog. There are plenty of books like this one that’ll teach you the basics.

how to start a virtual bookkeeping business in 5 simple steps

In this chapter on how to start a bookkeeping business, accounting firm and CPA firm, we’ll look at technology that can facilitate remote work, automate manual tasks and eliminate paper. After completing your business plan, you will have a good idea of what your estimated startup costs will be. In general, the startup costs for a bookkeeping business can be low if you work out of a home office as opposed to leasing office space, which we will discuss in the next section. The experts say that you should always have at least six months’ worth of expenses in the bank. It’s important to separate your business finances from your personal finances. While most people think they should wait until the business starts to generate cash flow, it’s important to track expenses immediately so that they can be deducted as startup costs.

However, it can be hard to estimate the number of hours needed so you may end up needing to refund some of the client’s money. You could focus on serving a niche such as real estate or you can generalize and offer a bit of everything, but be careful not to over-sell yourself. When you’ve identified your ideal market, you can put together a services package that can be customized to specific needs.

Do Your Research And Create A Business Plan

Bookkeepers take on the role of serious responsibility since they take care of sensitive information for clients and promise to keep records accurately. Choose a Structure – Different website platforms have many different styles and structures to choose from. Find a clean, manageable layout that will not distract visitors from your services. At first glance, Xero seems cheaper overall than QuickBooks, but that’s because their cheapest plan is very limited. In reality, QuickBooks is cheaper for smaller businesses, and Xero is cheaper for larger businesses.

Even a single mistake can be a massive hit to your business, your client’s business, and sometimes, even your personal finances. It’s best to look into standard business insurance policies for bookkeepers to stay on the safe side. Consider any fees you pay for software and other tools, and do plenty of research on average bookkeeping costs in your geographic area and industry. You want to be competitive, but not the highest or the lowest prices in your area and industry. According to Payscale, the average hourly rate for a bookkeeper is about $18 per hour—$12 on the lower side and $25 on the higher side. But before any figures, you should understand your fees should reflect your experience, expertise, notifications you carry, and your operating location—and not some statistic. Think about how much you want to charge for your bookkeeping services.

However, cloud accounting technology, video conferencing, and secure client portals make it possible for bookkeepers to serve clients all over the world. Starting a virtual bookkeeping business is a great way to earn money from home. If you find the right training program, you need not have any prior experience. Laws in your state may require that you establish a formalized business structure. A limited liability company, or LLC, is the most common type of business structure for small businesses. In most states, it’s easy to set up and costs less than $100.

Bookkeepers are in demand as most businesses and freelancers need to keep records to calculate taxes and manage finances. I started Money & Mimosas to be a financial education resource for self-employed folks. Then join the Money Makers for access to more information on how to manage your finances.

From the start, establish an accounting system for organizing receipts and other important records. This process can be simple and old school , or you can use a service like Shoeboxed. For US store owners, the IRS doesn’t require you to keep receipts for expenses under $75, but it’s a good habit nonetheless. To open a business bank account, you’ll need a business name, and you might have to be registered with your state or province. Check with the individual bank for which documents to bring to the appointment. However, as you know, small business owners often have a constant flood of satisfying milestones, coupled with expanding to-do lists. With your launch, you’ll need to get on top of the accounting tasks that come along with owning a store.

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Your office space should be private and free from distractions so, if you are setting up a home office, you should have a separate, private entrance and space for meeting clients. Some excellent insurance providers for bookkeepers, accountants, and CPAs include The Hartford, Hiscox, and Travelers. You will need to register your business structure with your state, which requires registration forms and fees applicable to each state. Take your own knowledge, experience, and qualifications, as well as your target clients’ budgets, into account when setting your fees. Prepaid time blocks are a combination of hourly and flat rate pricing. This fee structure is simple to quote and gives you the benefit of working off of a retainer.

  • To open a business bank account, you’ll need a business name, and you might have to be registered with your state or province.
  • You don’t need a huge amount of infrastructure to get started.
  • Professional Liability Insurance covers you for third-party claims of financial damages caused by negligence.
  • Another tool that will make your life easier is practice management software.
  • Professional liability insurance protects against allegations of negligence and is important because the main exposure bookkeepers face is an accusation of causing a client financial loss.

One of the most rewarding parts of building your own business is that whatever you put into it, you will see the outcome and reap the benefits. As you move along in your business plan, you get to decide how much time, energy, and motivation you have to give to your endeavor. Business owners alike know that the more you put in, the more you’ll get out. Add Contact Information – How can clients contact you for your service?

What Does A Bookkeeper Do?

I actually got my first client before the class even ended. People who knew I had been laid off were asking me about my “job seeking” prospects and I would tell them that I was starting my own bookkeeping business. Probably about half the people I told said that they needed or they knew someone who needed a bookkeeper, so I was already handing out my business cards. That first client was all I needed to gain the confidence to get my next client, which came a few weeks later. I project I will reach my income goal within three months. If you are starting a virtual bookkeeping business, you can keep your costs pretty low by working out of your office and by working as your only employee.

Always consider where your target market hangs out before engaging in any marketing activities. Collect business cards from every new business owner you meet. The next day, hop on to LinkedIn, sort through your business cards you received and connect with all small business owners you met and send a personalized message. If you’re just starting an accounting firm, you may not have any, but add some later when you do get them. Now it’s time to market your solution to get bookkeeping clients. When you get bookkeeping clients, over and above the accounting work that you’ll be delivering to your current clients, they’ll also need help throughout the year for ad hoc questions. Dealing with these ad hoc questions would form part of the support that you’ll be expected to provide.

Ah, one of my favorite pieces of software around, Teamworkis a real winner for project management. Not only did I run my last firm on it, but I also run my current business on it.

Even if you do not have a degree in accounting or a related subject or do not have experience working as a bookkeeper, you can still build a bookkeeping business from home. Here is a beginner’s guide to building a bookkeeping business so that you can know everything you need to know about starting your own bookkeeping business. You need to remember you’ll be on your own as far a liability goes when you run your own bookkeeping business. Don’t accept anything less than two-step authentication and cloud based solutions. Small business needs to keep track of the finances to gauge their success, fix what isn’t working and know when it’s time to grow.

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The content of Part-Time Money® is for general information purposes only and does not constitute professional advice. Visitors to should not act upon the content or information without first seeking appropriate professional advice. Philip Taylor, aka “PT”, is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon. I asked her what advice she had for someone who is thinking about getting started in this industry.

These will vary depending on whether you’re planning on a brick and mortar or online venture. However, there are some that are common to both like licenses, permits, advertising and marketing and utilities. You need to take an objective look at the market you’re proposing to be in.

Bookkeepers are there to not only help entrepreneurs organize their finances but also to navigate the real-world problems of their business. If you want to take it to the next level, you can hire bookkeepers to work for you. They can do the actual bookkeeping and you can focus on getting new clients and the administrative tasks of running a business. Getting the right training and setting up a profitable business from the onset is critical to your success when starting a bookkeeping business. Getting the right training on not only bookkeeping but also on how to run a successful bookkeeping business is critical to your success. It can net you an average hourly billing rate of $60 and help you run a profitable yet flexible business. Online accounting software will let you look at accounts at the same time as your client.

how to start a virtual bookkeeping business in 5 simple steps

There are lots of services that can help with this, and many accounting software options offer payroll as a feature. Finding the best business structure for your accounting firm is a critical part of not only ensuring success but helping to minimize both your tax burden and your risk. Your location and your goals will determine cost in several ways, including whether you want to start a traditional brick and mortar firm or are looking to create a virtual office environment.

How To Start A Bookkeeping Business

Digital software can help you monitor the workings of a business in real time. You can then report analysis from those numbers and enable your clients to make better informed decisions based on their finances. “These can then be sent to the accountant to produce the year-end accounts. Bookkeepers also prepare….and offer tax returns and payroll duties. So, if you’re interested in starting your own bookkeeping business, read this article to discover the key steps you need to take.

How much does QuickBooks certification cost?

Becoming an Intuit® QuickBooks Certified User (QBCU) signifies your students have the knowledge and skills to help manage the books effectively in the most prevalent bookkeeping application in small business today. The cost to take this exam is: $149, plus the proctoring fee at the testing center of your choice.

This post details how to start a bookkeeping business, and find and grow clients. However, if you are looking to focus on the multitude of other services accounting firms provide, it’s likely not a necessary credential to start. And while there are certain state-by-state exceptions about what can and cannot be undertaken by a CPA, they are not a requirement for starting an accounting firm. Starting an accounting firm is like starting any small business – it requires a lot of work. However, industry and consulting firms list accounting firms as one of the single most profitable small businesses a person can start right now. Now that you have learned how to start an online bookkeeping business, you should take the first steps towards becoming a renowned bookkeeper and getting clients. The best place to start to find clients is in your network.

By standardizing core processes, you’ll be able to better streamline your operations and ensure quality control when delivering client accounting services . They are the two most mature cloud accounting products around. And the nice thing is that you can set all tasks to repeat at a template level, which means that it’s set it and forget it.

How Many Clients Can A Bookkeeper Handle?

The industry is expected to add about 204,000 positions through 2022—an average rate of growth compared to other professions. Find opportunities for business owned by women and people of color.

Starting A Bookkeeping Business Faqs

By learning early on what your target audience is, you will gain huge insight on what procedures you need to take to keep your bookkeeping business at the top of potential clients’ radar. This can be a good option for earning money on the side or scaling to a full-time business. If you already have bookkeeping experience, you can translate your skills to the online world and find business owners who need your expertise. Even if you have no prior experience, you can still start a successful bookkeeping business. You don’t have to be a Certified Public Accountant or have any training before getting started. How much you make running your own bookkeeping business depends on several factors. The BLS data shows the median bookkeeper compensation at $40,000; however, self-employed bookkeepers can charge more per hour and work fewer hours so earnings will vary.

Perhaps you’ve worked as a bookkeeper for a larger company or firm and you’d like to branch out and start your own business. You may be ready to be your own boss, work virtually, make your own hours, and build your own accounting software program. Having said that, even if you fit into the second category, don’t rule out the possibility of starting a bookkeeping business. You might have to work for free and undergo training before you can make the business work, so don’t quit your day job immediately, but remember that everyone has to start somewhere. Hubdoc automates the process of obtaining and downloading bank statements. Even though accounting software connects with bank accounts, it’s not enough to know the income and outgoings of a business – you’ll also need to access the source documentation. Whether you’ve been in the accounting industry for years or you’re considering starting a bookkeeping business with no experience, there’s something for you to learn in this article.

Tim is a Certified QuickBooks Time Pro, QuickBooks ProAdvisor for both the Online and Desktop products, as well as a CPA with 25 years of experience. He most recently spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll.