This will give you the spending power to set up your company and put all of your business expenses in one place. That’s not only important for separating your business and personal finances, but can help you with your own bookkeeping how to start a bookkeeping business come tax season. Bookkeeping is a great home-based business that’s easy to start with very little cash. However, if your business is incorporated, or if it’s your sole source of income, the single-entry method just won’t cut it.
- Bookkeeping is a part of the accounting process that involves recording financial transactions.
- While you might be able to do this yourself to start as a small business owner, it’s best to make the investment in a qualified, professional bookkeeper to ensure your success in the long term.
- If you love numbers and helping people, this guide will show you how to start a bookkeeping business from the ground up.
- You may be ready to be your own boss, work virtually, make your own hours, and build your own accounting software program.
You can explore other options in our guide to the top-recommended business phone systems. Your name must convey your brand since that is what a potential customer will see before they sit down with you for that initial consultation. This is not the time to be cute, unless you can also be clear about what it is that you do. It should include everything you deliver to your client and you shouldn’t have a ton. If you’re going to be working remotely and holding video calls on Zoom, I highly recommend getting a good headset that is comfortable, but more importantly, has good microphone quality.
Get insurance
Also, run the name by a few people to see the impression they get of it. Once you have your finalists, run the names through your secretary of state’s business name database to make sure it’s available. You want your business name to reflect you as a person and the type of services you provide.
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. https://www.bookstime.com/law-firm-bookkeeping As a business owner, you’ll find that life is only as easy as the tools you use. Join the thousands of accounting firms that are already using BILL to run their operations.
Resources for Your Growing Business
Most businesses cost tens if not hundreds of thousands of dollars to launch. To understand what might work for you check out this helpful post about best business structure from FitSmallBusiness.com. Although bookkeeping is an investment, it’s generally much more affordable than attempting to correct costly mistakes down the road. Angie Nelson began working from home in 2007 when she took her future into her own hands and found a way to escape the corporate cubicle farm. Today she balances several successful online ventures and loves to share her passion for home business with others.
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In addition, you may choose to charge an hourly or flat fee, depending on the situation. Below, we’ve done the legwork for you to provide a free guide to starting a home-based bookkeeping business today. Bookkeeping focuses on recording and organizing financial data, including tasks such as invoicing, billing, payroll and reconciling transactions. Accounting is the interpretation and presentation of that financial data, including aspects such as tax returns, auditing and analyzing performance. Even if you aren’t planning on growing any time soon, you need to have a sense of how much money is coming in versus what is going out. On top of that, you need the data used in bookkeeping to file your taxes accurately.
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While bookkeeping focuses on the recording and reporting of a business’s financial activities, accounting takes a deeper dive and also includes things like financial planning and analysis. Essentially, both bookkeepers and accountants keep track of important financial data (“the books”), but accounts are more involved in the financial planning process. Many new companies will offer both bookkeeping and accounting services, depending on what their clients specifically need. Although bookkeepers are often referred to as accountants, there are distinct differences between the two positions. In addition, owning an accounting business typically requires a bachelors degree in accounting or finances—whereas owning a bookkeeping business does not require certification or a degree.
Time management, experience, and consistent energy will all be factors in your business success. The great thing about starting your own bookkeeping business is that all of these decisions will be yours to make. You will be the one putting the work in, so creating a personalized business model will be what sets you apart from competition, and what will get you the most fulfilling feedback. Build a marketing strategy that draws clients to your unique brand, while becoming familiar with the clients that you’re bringing in, and predict how they could support future business bookkeeping goals. In many cases, your future plans as a bookkeeping business owner will likely involve a combination of all three.
How to start a bookkeeping business
There are countless options out there for bookkeeping software that blends a good price with solid features and functionality. For every new small business, it might not make sense to hire a bookkeeper straight away. But as soon as you see growth in your company, it will soon be essential to have a highly detailed, consistent bookkeeping approach. While you might be able to do this yourself to start as a small business owner, it’s best to make the investment in a qualified, professional bookkeeper to ensure your success in the long term.
At no extra cost to you, some or all of the products featured below are from partners who may compensate us for your click. This does not influence our recommendations or editorial integrity, but it does help us keep the site running. Content marketing is another great way to spread the word about your business. By using search engine optimization (SEO) best practices, you can generate blog posts and web content that use keyword phrases to boost your visibility in top search engines. Having a clean, modern website will empower you to showcase your services.
Do I need to rent office space for my bookkeeping business?
These are straightforward businesses that, as their name suggests, can help reduce your personal exposure to liability. In other cases, depending on ownership structure and long-term goals, a partnership or even a corporation (C corp or S corp) might be the appropriate structure. It can be used for your bookkeeping business, allowing you to view your clients’ finances and create financial reports, among other things. Having a business plan to start a bookkeeping business isn’t a requirement, but creating one can help you get some clarity on what your goals are and how you plan to proceed with growing the business.
Records older than six years can be securely disposed of by hiring a professional document shredding company. For digital records, QuickBooks allows you to easily delete or condense historic transaction data to save you storage space and secure sensitive financial information. It takes care of the daily number crunching and data entry, but that’s ALL they do. Business accounting software and modern technology make it easier than ever to balance the books. A platform like FreshBooks, specifically designed for small business owners, can be transformational. A bookkeeping certificate can help you find a bookkeeping role, either as an in-house bookkeeper or as a freelancer.