How to Start a Bookkeeping Business – A Step-by-Step Guide

Are you looking for a way to start your own business? If so, then you may want to consider starting a bookkeeping business. Bookkeeping is a popular and growing industry, and there is plenty of room for new businesses to grow. 

This step-by-step guide will show you how to start your own bookkeeping business from scratch. We will cover everything from setting up your business structure to marketing your services.

So, whether you are just getting started or are already starting a bookkeeping business, this guide is for you!

Do you have a knack for bookkeeping? Are you looking for a business opportunity with low startup costs and doesn’t require a lot of space? If so, starting your own bookkeeping business could be the perfect fit for you.

If you’re like most people, you probably think of bookkeeping as something best left to the professionals. But what if I told you that bookkeeping could be a profitable and enjoyable business venture for anyone – even those with no accounting experience? In this step-by-step guide, we’ll walk you through everything you need to know to start your own successful bookkeeping business. 

So don’t wait any longer – let’s get started!

To What Extent Do Bookkeeping and Accounting Differ?

Bookkeeping and accounting are terms that are frequently interchanged. Bookkeeping Bookkeeping is a relatively minor but critically important component of the larger accounting process.

Accounting, sometimes known as bookkeeping, is the process of concurrently recording and reporting financial information.

At the same time, accounting makes use of such data in order to determine the financial situation of the company and to decide how the finances of the organisation should be managed.

To summarise:

Bookkeeping is the process of documenting and reporting financial information.

Accounting is the process of analysing financial information and developing a strategy for financial management.

What Does Bookkeeping Entail?

Bookkeeping is the process of managing a company’s day-to-day financial operations. This includes the following:

  • Making payments (e.g. bills) (e.g. bills)
  • Attempting to Collect Payments from Customers and Clients
  • Making certain that your company pays the appropriate amount of tax
  • Making a claim for unpaid taxes on behalf of your company (e.g. expenses)
  • Managing payroll to pay your personnel right

Bookkeeping monitors payments coming into and going out of an organisation by using these three types of financial records:

Cashbook: This is a record of your company’s cash flow, which includes everything that goes into and out of your company’s account.

An invoice for sales keeps track of everything you’ve sold, including whether or not the customer has paid their bill.

A purchase invoice is a document that details what you have purchased (including services) as well as how you have paid for each individual purchase.

These are the bare bones of the records (or ‘books’) that you will need to keep, although there will almost certainly be more. It is essential for your company to maintain accurate records in the event that it is subject to an audit. Financial reporting relies on these books.

The Numerous Advantages of Beginning a Career in Bookkeeping

You might have experience working as a bookkeeper for a larger corporation or firm, and now you’re thinking of striking out on your own and launching your own company.

It’s possible that you’re ready to run your own business, work remotely, set your own hours, and write the code for your own accounting software.

When beginning your own bookkeeping firm, it would be beneficial for you to keep the following items in mind. However, before you make that jump, you should first educate yourself on the many positive aspects of launching your own small business.

1. You get to choose your management approach

There are numerous approaches to bookkeeping and accounting, and each bookkeeper has their own.

You will gain the ability to traverse several tactics and hone in on those that will be most beneficial to the success of your firm based on the training, certification, and experience you have received.

You are the only person who can choose which method of accounting works best for you; select a method that enables you to succeed.

2. You have the ability to pick your own hours

Because you are the sole proprietor of your own small business, you have complete control over the number of customers you serve, the amount of revenue you bring in, and the number of hours you put in each day.

3. Your business can be customised, and it can expand at your own speed

Create a marketing approach that will entice customers to choose your one-of-a-kind brand as you get to know the customers you are bringing in and try to anticipate how they will help you achieve your long-term bookkeeping goals for the company.

When you run your own bookkeeping business, you get to decide everything, which is one of the many benefits of going into business for yourself.

Because you are the one who will be putting in the work, developing a personalised business model will set you apart from the other businesses in your industry and provide you with the most satisfying feedback.


Step One: Prepare a Business Plan

Spend some time sitting down and writing out a business plan, which is essentially a road map for how you envision your company developing in the future.

You are free to be as imaginative as you like with this and should make sure to include both short-term and long-term objectives for your accounting firm.

Your reason in wanting to start this new endeavour should be defined in the business plan you create.

Be explicit about what it is that you want to achieve; for example, what aspects of accounting give you the most pleasure, and how do you want to maximise that pleasure in order to establish a purpose practise?

Discovering who your ideal customers are will be an additional crucial step in developing your business plan. Once more, it is essential to determine the types of possible customers that you will be bringing in. Are you seeking employment opportunities with high-profit-margin small businesses? Or are those who work independently going out on their own?

Step Two: Establish a Method of Accounting

It’s possible that taking this step is the single most crucial thing you can do to launch a profitable bookkeeping firm.

When you choose to run your own company, one of the primary motivating factors behind your choice may be the possibility of cutting back on the number of hours that you work each week. Time management is the only strategy that will allow you to make that change a reality.

The development of an easy-to-use bookkeeping and accounting system is essential to effective time management. This step may require some trial and error, but you will use your abilities and experience to dial in a software programme that is repeatable and strategic.

This will ensure that the management of each customer you chose to collaborate with follows the same structured pattern.

When looking to hire more help for your company, having an easy-to-use accounting system will be an absolute must. This will allow you to orient the new employees to the software that is already in place, and they will be able to begin working immediately.

Step Three: Promote to Possible Customers

A robust marketing strategy is required from the very beginning for a company to be successful. You will acquire insight into the processes you need to take to maintain your bookkeeping firm at the forefront of potential clients’ minds if you begin by gaining an early understanding of the demographic that constitutes your target audience.

Refer back to your original company plan and answer this question: what kind of customers are you hoping to attract? Take, for instance, the scenario in which you market your accounting services to sole proprietorships and partnerships.

In that instance, you will develop procedures that are specific to the provision of services to freelancers, and you will encourage freelancers to employ your company rather than a separate bookkeeper.

The process of dialling in your brand is yet another facet of marketing, and it is closely related to the kind of customers that you are looking to attract.

Your potential customer base will automatically be drawn to your bookkeeping services if you have a solid understanding of the market and of what sets you apart from other firms in the industry.

Determine the aspects of bookkeeping in which you excel (for example, tax returns, payroll, financial data entry, insurance, and so on), then highlight those services on your website in such a way that prospective customers are convinced they need your help and want to hire you.

Step Four: Make a Website for Your Company

As soon as you have your business structure, accounting system, brand, and target audience dialled in, you will be ready to exhibit it on a website that is dedicated to professional bookkeeping.

While it comes to differentiating yourself from your rivals, having a powerful website is one of the best ways to do it, and there are important factors to think about when designing your platform.

  • Choose a Structure – There is a wide variety of styles and organisational patterns across the various internet platforms. Find a clear, maintainable layout that won’t draw the attention of your visitors away from the services you provide.
  • Make a Statement – What one sentence or phrase do you want prospective customers to take away from their experience with you that will differentiate you from other professional bookkeepers and encourage them to employ you?

When you tell guests about your experience in the field, it makes them more interested in working with your organisation. For instance, clients will find it more appealing to collaborate with a qualified professional bookkeeper; hence, mentioning your training and qualification could prove useful.

  • Guide Your Clients – It will be easier for you to familiarise customers with what your company has to offer if the services featured on your website are well-organized and easy to reach. Inform your customers, for instance, if you offer an online bookkeeping service and describe the means through which you and your customers can contact digitally. Make sure that each customer who visits your website is aware of your offerings, distinctive brand, and overall objective.
  • Add Contact Information – How can potential customers get in touch with you to enquire about your service? Indicate to potential customers where they can locate you online through social media (LinkedIn, Facebook, and apps), as well as how they can get started working with you and schedule a consultation appointment with you.

Step Five: Make Every Effort To Be Successful In Business

Once you get your bookkeeping firm up and running, you will need to have faith that your method will bring customers to you. Your ability to effectively manage your time, gain experience, and maintain constant levels of energy will all contribute to the success of your firm.

Managing and adjusting minor details in the early stages of your business will help you dial in your bookkeeping services. For example, you may discover that you are attracting a different clientele than you had anticipated, or you may need to hire additional assistants to help with a growing workload.

Keep in mind the initial goals that you set for your new firm, and make sure that you put constant efforts into bringing those goals to life as you establish your professional practise. As you navigate the waters of your new business endeavour,

Advice on Bookkeeping Procedures for Small Businesses

The following advice will get you started on the right foot when it comes to keeping the books for your small business.

1. Maintain records of each payment

Make use of your books to keep track of every payment, and ensure that it is crystal obvious when each payment was made or received, so that you can readily locate them in case you need to refer to them at a later date.

2. Select an accounting technique

Because your bookkeeping will serve as the foundation for your accounting, you need to choose which approach you will employ right from the start. The date of the invoice is the point at which income and costs are recorded in traditional accounting. When you receive or pay money, the date that the transaction is recorded is the date used in cash accounting.

Cash accounting eliminates the possibility of having to pay taxes on money that your company has not yet received, but it may only be used by businesses with annual turnovers of $83,000 or less.

3. Establish stringent deadlines

Never be late with payments, and always set your customers a payment deadline so you may efficiently pursue payment from them.

Make a note of any clients who are consistently late with their payments, and if they continue to do so, consider terminating your relationship with them. This practise is known as credit control, and the objective is to maintain a healthy cash flow at all times.

4. Track your spending

You can lower your overhead costs by claiming tax deductions for a variety of business expenses. You will need receipts to back up the claims you make, so make sure to store them someplace secure and organise them according to the various types of business expenses.

Be sure to keep business and personal costs in separate accounts so that you can readily determine which of the former can be deducted from the latter to lower your taxable income.

5. Organise your bills and statements by date

Alternately, avoid wasting both your time and that of your bookkeeper. For instance, make sure that all of the bank statements and invoices (both for purchases and sales) are available, accurate, and arranged by date.

If you don’t do it yourself, you’ll end up paying your bookkeeper for the time they spend tracking down and organising these records, even though it’s a simple task that you can handle on your own.

Worse, if documents go missing, you might have to pay a fine for paying your taxes late.

Maintain two sets of files for purchase invoices, one for paid invoices and one for outstanding invoices. Organize both sets of files alphabetically according to the name of the supplier. Always make it a habit to transfer bills once they have been paid in full.

When it comes to sales invoices, also known as money that is owed to you, numbering them consecutively in order of when they should be paid can allow you to efficiently chase after payment.

6. Select appropriate software

It’s possible that you won’t require specialised software for bookkeeping because you can handle everything with Microsoft Excel or a freeware alternative.

On the other hand, when your requirements change, you could find that you require a more specialised plan. Inquire with your accountant about the programmes they recommend using.

7. Establish a schedule for monthly reporting

The safest approach to keep track of the financial state of your company and make certain that you are not taken by any unpleasant shocks is to generate reports on a regular basis—at a minimum, once a month. At the very least, each of your monthly reports has to provide a statement of profits and losses in addition to the balance sheet. Now you have a running commentary on how well your firm is going.

8. When should you hire a bookkeeper?

If you are just starting out with a small business, it can make sense for you to manage the bookkeeping on your own. Keep a log of the amount of time you spend studying each week as you advance in your career.

Find out how much money you earn for the company in an hour and compare it to how much it would cost to hire a bookkeeper. You may do this by calculating the worth of your own time.

For instance, the handling of a month’s worth of accounts by a professional bookkeeper might take only a couple of hours, so it won’t be long before this becomes a more cost-effective option.

Essential Bookkeeping Abilities You Have To Have If You Want To Have A Successful Career

1. Organising abilities

If you want to be successful as a bookkeeper, this is the most important quality you’ll need. You will be in receipt of a large quantity of data, which, whether in the short term or the long term, you will be required to organise.

Due to the fact that individuals view you as a walking encyclopaedia of information, they will approach you on a daily basis with a multitude of inquiries. Because of this, once things get chaotic, you need to have a feeling of organisation of the things going on.

2. Observation of details

Naturally, this trait is intertwined with the sense of organisation that you possess as a whole. However, we feel it is important to emphasise this point in particular because the difference that your focused approach creates is significant.

As was just mentioned, a business could base important judgments on the information that you offer for them to use. Therefore, it is crucial to make every effort to ensure that no important elements are overlooked.

3. Honesty and Openness

The fact that the majority of individuals in your workplace look to you as their primary source of knowledge denotes that they have the utmost confidence in your capabilities.

It would be helpful if you rewarded them with the same feedback that combines honesty and commitment. This would encourage them to continue helping you.

It’s possible that the information you’ve been given is extremely sensitive, particularly if it involves dealings with money. Therefore, be sure to retain them in that state, and at the same time, offer your coworkers a strategy that is transparent if it is required.

4. Abilities in communication

We have to be the ones to break it to you now, but you will have interaction with other people. It is a common misconception that bookkeepers are simply concerned with numbers and analytical work; these individuals are, however, gravely mistaken in their assumptions.

In order to collect the necessary data, you will have to interact with other people. Therefore, you need to have strong communication skills in order to question them appropriately and elicit the specific information you require. This conversation may take place in person or via internet means; either way, its significance cannot be overstated.

5. Aptitude for solving issues

Another attribute that people anticipate bookkeepers to possess is accuracy in their work. In the world of money, there is no way to avoid encountering challenges and obstacles. They are practically inevitable. Therefore, it would be beneficial if you were able to maintain enough composure to see those problems far in advance of others and find solutions to them.

6. Tech-savviness

The shift towards storing data digitally has been well under way for some time now. You have to stay current with the most recent software and working tools available if you want to endure this ongoing trend.

It will take your analytical skills to connect a large number of dots, and because the technology is available to assist you, there is no reason not to give it a try.

If you are always looking for new ways to improve the effectiveness of your work, you will never go out of date for the company or organisation that you are employed by.

7. Techniques for managing one’s time

If you are unable to appropriately prioritise your responsibilities at the appropriate moments, none of your other skills or capabilities will matter. Because of this, you should constantly have a calendar and make a list of your priorities, deadlines, or other activities that are linked and need to be finished within the anticipated amount of time.

Your day-to-day productivity can be significantly increased by developing effective time management skills, as you are likely to be responsible for a large number of tasks and interact with a large number of people.

8. Mathematical aptitude

Throughout their whole career, a bookkeeper will be required to conduct duties that include cyphers and numbers in some capacity.

Because of this, you should take this as a warning that if you want to pursue this vocation, you will need to be comfortable dealing with a little bit more than simple arithmetic abilities.

The type of company you work for may influence the level of familiarity you need to have with numerical concepts in certain situations.

However, there is no getting around the fact that you will be expected to deal with calculations as part of a routine, and there is no way to avoid this.

9. Important mental exertion

We are aware that this will not always be manageable, and that each of us has a propensity to forget things at least occasionally.

However, in order to be a good bookkeeper, you need to write everything down and do your best to recall the specifics of your evidence.

When it comes to piecing together a jigsaw puzzle, each and every piece of information that can be obtained is important.

What Role Does Accounting Play in the Success of Your Company?

Accounting does more than just make things simpler during tax season and provide you with a clearer picture of how well your company is doing financially.

Accurate bookkeeping can also make a company more appealing to potential customers. The following is a list of frequent ways in which effective accounting can assist in making your company more useful to your customers:

1. Monetary stability

When the finances of your company are in order, you are able to get a clear picture of how much money is coming in and how much money is going out.


You may also build more precise estimates for future revenue and expenses in order to guarantee that you have sufficient financial reserves to see you through any difficult times that may arise in the future.

If your company’s finances are secure, you’ll be able to give your customers a reliable and satisfying service. Because there will not be an unforeseen need to cut costs due to a lack of funds, you will not abruptly reduce the number of staff you have or take on so much new business that the quality of the job you produce will deteriorate.

2. Enhanced effectiveness

Accounting done correctly provides you with the most recent financial data pertaining to your company. And this can help you make important judgments regarding the need for additional business investments as well as the timing of such investments. Consider the possibility that updated tools will enable you to complete tasks more quickly. Could this indicate that you provide superior service to your customers?

You can determine whether or not it is the appropriate moment to invest more cash in your business and how the effects of those investments will play out in your cash flow if you have accurate financial data.

3. Intelligent marketing

Your company’s financial records provide you with information about your business’s spending and cash flow, which can assist you in making more informed decisions on the marketing of your company.

If you have accurate accounting information, it will be easier for you to determine when the best moment is to initiate a marketing campaign and to evaluate whether or not your marketing efforts are producing the outcomes you want.

Start a Successful Bookkeeping Business

Building your own company allows you to directly observe the results of your efforts and enjoy the fruits of your labour, which is one of the most satisfying aspects of this endeavour.

As you progress through your business plan, you will have the opportunity to evaluate the amount of time, energy, and motivation you are able to commit to your endeavour. Both employees and owners of businesses are aware of the maxim that “the more you put in, the more you’ll receive out.”

Regardless of the reasons that led you to launch your own company, if you take the necessary actions to develop a solid business plan, establish a reliable accounting system, and attract customers by maintaining a website that is both organised and professional, you will soon have your first client and will be well on your way to achieving your business bookkeeping objectives.

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