How to Start a Virtual Bookkeeping Business in 5 Simple Steps

how to start your own bookkeeping business

As per the laws, there is no problem at all having a tax person handling your bookkeeping. It’s about as safe an industry as you could find, and having a steady flow of clients means there’s a good chance of making a healthy profit. If you choose the latter, the average salary of a bookkeeper in India is above Rs/month. It costs just around Rs. 11,000 to register and around Rs. 4,000 to comply with MCA regulations.

You want to protect your business from possible legal issues in a financial career. This means it’s a good idea to incorporate your business to protect your personal assets. Any business requires a plan of action, including a freelance business.

Required Licenses for Virtual Bookkeepers

The next step is to choose a legal business entity type for your virtual bookkeeping business. Another aspect of marketing is dialing in your brand, which goes hand in hand with the type of clients you want to bring in. Knowing the market and what makes you stand out from other competitors will naturally draw your potential client base to your bookkeeping services. Becoming a bookkeeper can feel daunting at first, but follow these steps and you’ll be well on your way.

  • Or, they may need a bookkeeper but be too busy to actively search for one.
  • You also want to look into attending industry events to network and market your services.
  • Startup costs are minimal, so there are few barriers to opening up shop.
  • This means looking at assets, liabilities, equity, and profit, and figuring out what they mean for the business in question.
  • As a “Third Party Designee,” pursuant to IRS Form SS-4, Easy Doc Filing, LLC prepares and submits applications for an Employer Identification Number (“EIN”) to the IRS on behalf of its clients.
  • There are two pieces of the business plan that deserve a little extra consideration.
  • You can set up a website for free or somewhat inexpensively to start, and may want to enhance it when your business starts taking off.

You do not need an expansive or expensive website to get started. You can create a simple website for less than $50, including the domain name. If you don’t have experience, you can find many predesigned websites online or have one put together for less than $500. For a bookkeeping business just beginning, an insurance policy costs less than your daily cup of coffee. You should request quotes from several agencies to ensure you get a good deal.

How much can you make owning a bookkeeping business?

The only way to make that transition a reality is by time management. This step may be the most important aspect of beginning a successful bookkeeping business. When people hear about you for the first time, what do they think? Or will they just see another bookkeeping company that doesn’t stand out from the crowd.

How many clients can 1 bookkeeper have?

Once you've mastered finding clients for your bookkeeping business, there will come a time when you need to hire extra help, such as a subcontractor. Typically, a bookkeeper can handle 20 to 30 clients on their own.

When you dial in your business structure, accounting system, brand, and target audience, you’re ready to showcase it on a professional bookkeeping website. Take time to sit down and write out a business plan– a roadmap of what you’d like your business to look like. This can be as creative as you’d like, and include short-term and long-term goals that you have for your bookkeeping business. 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.

Why Pay?

And, of course, your rate isn’t fixed — you can always change it if you feel like you’re not priced correctly. It was really a garage, and it was located down a very long, muddy dirt road. Yes, instead of a receptionist, a goat and a chicken received me when I got out of the truck.

how to start your own bookkeeping business

Find the balance of deducting enough expenses but not spending on unnecessary things. Personally, our health insurance goes through my husband’s employment, so I don’t pay anything for that through my business. However, that is something to consider as a contractor, and that is a fairly significant expense each month.

Conclusion on starting a bookkeeping business

Have all your accounting software subscriptions in place before you get a client. As your business expands and you add team members, you may need to reevaluate your software needs. If your current clients start referring you to other businesses in the same industry, you might end up in an unexpected niche. Next, set up a separate meeting to present the 3 service options you’ve created to your client to be rather than just blindly sending a proposal. After potential clients contact you, you’ll schedule a meeting for your initial consultation, aka discovery call. This is arguably the most critical step in the entire process to acquire and find new clients.

Another key aspect of operating a bookkeeping business is making sure you retain accounting records. These are essential for auditors, IRS agents, and government regulators during financial inspections of any client or business owner you work for. If you’re going to start working as a full-time bookkeeper single-handedly, you can choose to form a sole proprietorship. However, you’ll be liable for all business debts and lawsuits as a sole proprietor.

Setting up your business

You’ll find plenty of information about the bookkeeping profession on its website. For example, the professional certifications and qualifications people have to take in order to qualify as a bookkeeper. Setting your fees and getting your pricing right for your bookkeeping business will take a bit of work but don’t feel that you need to price yourself too low. “These can then be sent to the accountant to produce the year-end accounts. Bookkeepers also prepare….and offer tax returns and payroll duties.

It’s really touch and go at the moment with a lot of these new companies. They’re raising a lot of money, but they aren’t exactly proven yet. I’d also be keen to know how you think accounting firms find the right niche. I’m an entrepreneurial CPA that founded Xen Accounting, a 100% cloud-based accounting firm, in 2013. Following its acquisition in 2018, I started Future Firm to help accountants fast-track the growth of a modern, scalable accounting firm of their own.

Depending on what state you live in, the cost for a business license can vary. In Oregon, for example, it is $150 annually to file a business license, which budgets to $12.50 per month. I created my website on Wix, and it is $17 a month to host it there, so that’s what I’m budgeting for this example. You can hire it out and have someone build it for you or host it for you, so the budget may look slightly different based on what you prefer to do.

  • I budgeted $25 a month on advertising for this bookkeeper, as those costs truly are relatively low and only optional expenses.
  • Professional associations also offer certifications so that you can hone your skills and market yourself as a professional bookkeeper.
  • 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.
  • However, the type of business model you choose and your location will affect the business registration process.
  • You need a number of other business essentials to start offering virtual bookkeeping services to clients and make money.
  • However, there are still plenty of ways to create your own bookkeeping business, even without much money.

This can increase to $62,000 if you stick with it long enough to get more clients. As a virtual bookkeeper, you won’t need to worry about finding a higher paying city since your small business is virtual— you’re free to live in an area with a lower cost of living. Anyone operating in the US needs to make sure that they’re aligned with GAAP when working on financial reporting. GAAP forms the basis for all bookkeeping businesses and outlines the assumptions, principles and standards used to analyze transactions. GAAP standards were created and are regularly updated by the Financial Accounting Standards Board (FASB). As a new business owner, you may also look for a mentor or consultant to guide you through the process of starting a bookkeeping business.

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