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You play an important role in the growth and organization of other firms as a bookkeeper. When starting your own bookkeeping business, you’ll want to do it right the first time. A nice arrangement will make you appear professional to potential clients. Furthermore, it will allow you to focus on the task you enjoy – bookkeeping – rather than addressing problems in your company’s foundation.

What’s the good news? Starting doesn’t have to be difficult. There are numerous approaches to starting an accounting firm, which can make the process seem intimidating.

We’ve broken down the process into some simple steps.

1. Get Certified

While a license or certification isn’t technically required to get started, it shows your customers that you have the expertise to take care of their financials. Plus, you’ll feel more confident with the necessary knowledge for the role. There are a few ways to go about training – either through an organization or a community college.

Bookkeeping certifications aren’t regulated by the government, so it’s important to go through a well-known organization for certification. The top two are the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB). Both provide coursework and exams in all things bookkeeping.

Most community colleges also offer bookkeeping classes. You can attend at your own pace, either online or in person. Community college is also fairly affordable, so you can make it fit into your budget. These courses typically lead to a certification, but be sure to check before enrolling.

2. Research Your Market and Niche

Every business needs a bookkeeper, so you have a wide variety of customers to choose from. Without picking a market, you might find yourself spread thin by learning the intricacies of every industry. By choosing a niche, you can build specific skills, credibility, and a reputation as the expert in your chosen market.

Once you decide on a niche, do some market research. Reach out to business owners and ask what types of bookkeeping services they need. Do they employ a bookkeeper year-round? Do they have a software preference? What’s their budget?

It’s also a good idea to investigate the competition. Check out how many other bookkeeping businesses there are that specialize in the same industry. Take note of the packages they offer and the prices they charge.

3. Craft a Business Plan

Your business plan allows you to organize your ideas and methods for your bookkeeping business in one place. It can guide your decision-making, but you can also adjust it in the future if anything changes.  

Make note of every aspect of your business in your plan. This includes:

  • Business name
  • Ideal customer
  • Services offered
  • Pricing per package, hour, and retainer
  • Startup costs
  • Marketing strategy

You may also use your business plan to get funding. In this case, your business plan will need to be a bit more formal and include:

  • Executive summary
  • Company overview
  • Analysis of the competition
  • Marketing plan
  • People requirements
  • Financial information (startup costs and earning projections)

4. Register Your Business 

Establish your business by getting it registered. You’ll need to decide on a business structure. There are four options: sole proprietorship, limited liability company (LLC), partnership, and corporation. If you’re just getting started as a one-person business, you’ll likely do best as a sole proprietorship or LLC. You’ll need to check with your secretary of state’s office to get the exact guidelines for registering your business in your state.

5. Get Insurance

It’s important to get insurance as a bookkeeper because you deal with your client’s finances. If you make a mistake, it is possible that you could get sued. Liability protection can cover lawyer fees and settling costs. Although insurance isn’t required, it could potentially save your business from taking a huge loss.

6. Choose Your Software

Your chosen software is critical for your business. You’ll also spend much of your time using it, so it should be software that you like. The right software for your business will depend on what services you offer. Quickbooks, FreshBooks, and Xero are popular among bookkeeping and accounting businesses. 

Most bookkeeping software companies offer certifications for their products. These credentials can help you work faster and more accurately. Plus, they allow you to market yourself as an expert to potential clients.

Read Also: Earn a Living as a Business Broker

You may also need payroll software if you plan on hiring employees. Practice management or customer relationship management (CRM) software can also be useful, allowing you to organize your tasks and sort through client work. QuickBooks offers bookkeeping, payroll, and management software all in one, so it could be a good option if you don’t want to juggle multiple platforms.

7. Set Up Your Foundations

There are a few business elements you’ll need to become fully functional. First, set up a website. It doesn’t have to be fancy – in fact, there are plenty of website builders that make creating a website easy with preset options. Your website will allow you to serve customers all over the world and market yourself as an expert. 

You’ll need a secure way to share files with customers. This is how clients can send you bank statements, receipts, and more. Some popular options are Dropbox, Huddle, and FileCloud.

A business bank account is also necessary for any type of business. This will ensure that you keep your personal and business finances separate, which is key for liability protection and tax purposes. You’ll want both a business checking and savings account. You might also consider getting a business credit card for any expenses.

8. Choose Your Payment System

The last and most important piece of your business infrastructure is your payment system. How will clients pay you for your services? A good payment system will provide you with a full payment infrastructure, meaning you get a payment gateway, merchant account, and payment processing services. 

Your payment system should make it easy for your clients to pay you – you never want to lose a sale because of a poor user experience. It should support a wide variety of payment methods and let you offer your clients multiple ways to pay, like via invoice, checkout, or link.

Pay.com offers all of the above, making it simple for your clients to pay for your services. Plus, Pay.com is super user-friendly. In just a few clicks, you can set up your payment system via the Pay Dashboard – no technical experience is required.

9. Market Yourself and Find Customers 

With your business fully set up and certifications in place, you’re ready to accept clients. There are a variety of ways to market your business. You can run paid ads online, send cold-pitch emails to your ideal customers, or utilize direct mail marketing. 

Consider your niche and target market. Where does your ideal customer spend their time? For example, you might build an Instagram presence if you want to specialize in helping solopreneurs and online coaches. On the other hand, direct mail is likely a better option if your niche is the automotive industry. 

Networking is also critical. Connect with friends and family and ask if they know anyone who can use your services. Join online groups for bookkeepers, where people may be looking to offload clients. Ask any existing clients for referrals. You might also join industry associations related to your niche, which can connect you with potential clients in person and online.

How do I Start Online Bookkeeping?

While the steps outlined below need to be completed at some point as you establish your business, getting your first virtual bookkeeping client should be the first thing you do. This way, you’ll be growing your reputation alongside building your business. 

1. Establish Your Company

You should figure out the business structure you want to create. Many bookkeepers start as sole proprietorships, meaning you work alone and provide all the services yourself. But you may also think about forming a limited liability company (LLC) or corporation.

The ideal business entity type for your virtual bookkeeping services will depend on your long-term goals and revenue expectations. Each state also has different rules for business taxes, so you’ll need to consider how state taxes would apply to your business.

If you are starting the company with a partner, make sure a partnership agreement is part of your business plan. This agreement ensures you are both on the same page concerning business operations.

Lastly, part of this process is picking a business name, which you should do with care. You’ll be using the name for years, so be sure it’s a professional and accurate description of your work.

2. Get the Necessary Licenses and Permits

Permit and licensing requirements vary by state and locality. If you’ve established a corporation or LLC, the entity needs to get registered with your state. Sole proprietorships do not require formation filings, though they often require business licenses.

Once you’ve formed your entity, you must apply for an employee identification number (EIN) with the Internal Revenue Service (IRS). The EIN identifies your business and is separate from your social security number (SSN). An EIN is optional for sole proprietors, but it allows you to receive 1099s at the end of the year from your clients without giving them your SSN. 

You are required to register for a business permit in most locations. Fees vary from a few dollars to a percentage of revenue, depending on your business location. You should consider the licensing fees when deciding where to locate your virtual bookkeeping business.

If you plan on operating under a fictitious business name or several different names, you may need to file a “Doing Business As” (DBA) statement. DBAs can usually be filed with your county or parish.

3. Get Insurance

Business insurance will protect you from claims against your business, but you need the correct types of insurance policies. 

One of the most critical steps to take in your virtual bookkeeping business is to invest in professional liability insurance, also known as errors and omissions (E&O) insurance. This insurance will cover you against claims you made a mistake in preparing a client’s books. The amount of coverage you need will depend on your client list. 

Professional liability insurance will protect you against errors, negligence, and omissions that may occur during your bookkeeping engagements. Your premiums will vary depending on what type of services you offer and your projected revenue. 

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.

You should also consider health insurance as an added expense, especially if you previously had health insurance through your employer. Replacing employer-sponsored coverage can be one of the most expensive costs of going into business for yourself. 

Many states require residents to have some level of health insurance coverage. Health insurance is a much sought-after benefit if you plan to hire employees. If your virtual bookkeeping firm has employees in several states, you may want to work with an insurance agent to find coverage that works for all your employees.

4. Create a Web Presence

Websites are essential for virtual bookkeeping firms. Without a website—and since you have no physical office—your business may appear to be fly-by-night. 

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.

5. Get Equipment

Starting up a virtual business doesn’t require ordering a bunch of office supplies. We no longer need ten keys or ledger paper, especially in a virtual bookkeeping firm. 

That doesn’t mean that there aren’t any startup costs. You will need a complete office setup, including a good scanner and possibly a printer. You’ll need a reliable internet connection and a computer that can run accounting software quickly. 

Virtual bookkeepers juggle several files constantly. Having multiple monitors is key to working efficiently. You should also consider a reputable webcam and headset for client meetings. Sign up for meeting software such as Zoom or Teams.

6. Set Pricing

One of the first questions potential clients will ask is about your prices. You need to be ready to answer! Start by deciding how you are going to price your services. 

If you got into virtual bookkeeping for the freedom and flexibility, you might want to work off retainers, but you also have the option to bill hourly.

7. Advertise Yourself

A virtual bookkeeping firm can’t rely on signs outside an office building to advertise itself. You need to find a way to put yourself out there. Think about various ways you can reach out to potential clients or get your business in front of them. Every contact with a business owner is an opportunity to land a new client. 

Business cards are a bit old school, but they still work well when trying to land a new client. Cards are great for in-person meetings if you have a local client. 

For virtual bookkeeping companies, your focus should be on online advertising. You can use Facebook or Google Ads, but consider social media options such as TikTok, Instagram, Twitter, and Pinterest, which have also proven successful for some firms.

About Author


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