Accounting firms are booming these days with the amount of data entry and financial record keeping required. Accounting can even be quite profitable, since everyone needs accounting and always will; service never really stops being valuable.
If you want to learn how to start an accounting business, you’ll want to consider the following outline to do things right the first time.
What is contability?
Accounting simply means maintaining financial records for a company or an individual.
Your job as a bookkeeper is to keep good records of daily financial transactions (money in and money out), and then prepare monthly or quarterly financial reports.
Access these useful guides on other types of businesses you can start.
You don’t need an accounting degree or have a CPA to be a successful bookkeeper. In fact, you just need to be organized, pay attention to details, and decent computer skills.
You may already have some accountant skills without realizing it. I could stretch it and call myself an “accountant” since I keep track of money coming in and going out on my blog.
While large companies employ full-time accountants, smaller companies often hire independent accountants (that’s where you come in) to help them stay on top of their finances. That doesn’t mean you can’t work for big companies.
How much does a bookkeeper earn?
According to reports from the U.S. Bureau of Labor Statistics, the average annual salary for a bookkeeper is $40,000 per year.
As a freelancer or contractor, you can actually earn a higher hourly rate while working fewer hours.
Become a certified bookkeeper
First, you’ll need to establish that you have credibility within the accounting business if you want to gain long-term clients. Chances are you’re only thinking about starting your own accounting business if you’re already an accountant. But if not, you should seek accounting certification before starting the business.
You can do this a couple of different ways. he American Institute of Professional Accountants offers a route to certification, which involves more than 3,000 hours of work and study experience. The National Association of Certified Public Accountants is another path, which involves passing an exam after earning an associate’s or bachelor’s degree in accounting.
Make a business plan for your accounting business
After earning your professional bookkeeper certification, it’s time to make a business plan. This involves writing down your profit projections, how much the business will cost, what types of services you will offer, and a projected balance sheet. Basically, think about everything that could affect the performance of your business and write it down so you can stick to the plan as you get into the details. Investors may also require a business plan if you need significant startup capital.
Set Up Financing
Speaking of capital, you should come up with a financing plan before starting your business. Bookkeeping won’t make you as much startup money as something like a contracting business, but you’ll still need some money to purchase the accounting software, like Wave, and other supplies you need to perform bookkeeping services. You may also need to rent office space or hire employees. Calculate your financing beforehand and determine if you have the cash saved to pay for things yourself or if you need to take out a loan from the bank.
Incorporate your accounting business
If your financing looks good, you can move forward with incorporating your accounting business. It is always a good idea to fully incorporate your business as an LLC or as a different type of business. This limits your personal liability and prevents you from losing your personal assets if something goes wrong. Other types of business structures, such as a partnership, corporation, or sole proprietorship, are alternative options.
Name your accounting business
You will also need to think of a name for your accounting business. This can be fun, but it’s important to think of a name that is memorable and to the point. You want potential clients to know exactly what type of service you offer and for your name to be easy to remember when they are looking for someone to perform accounting services. «Sanchez Accounting» is a decent example, although you could easily be more creative while still missing the point.
Set up your accounting business
Now is the time to fully set up your business. This may involve hiring an answering service in case you need to respond to multiple clients every day (and during busier times of the year, like tax season). You’ll also want to do things like set up a business bank account to keep your personal and company funds totally separate.
A business mailing address is another required aspect that you should keep in mind at this point. For this reason, renting a PO box at your local post office is cost-effective, but it may seem a little less professional than if you had your own office space. You can rent a UPS mailbox to overcome this limitation, while still being cost effective.
Get your office in shape too. You may have a home office, in which case setting everything up shouldn’t take much time. But if you decide to set up an office in a different building or location, this may take a few weeks.
Get insurance
You don’t want to skip insurance, even as an accountant. There are certain types of liability insurance which you should invest in in case a mistake is ever made on a client’s books. This protects you in the event of a lawsuit. You may also need to look into workers’ compensation insurance if you hire employees.
Purchase of materials/software
After all this, you should consider getting the right materials or software you need to carry out your accounting services. Bookkeeping or bookkeeping software is the first thing you’ll need, and you may already have it if you have a professional background as a bookkeeper.
You may also need payroll software or a payroll service. Tax software, practice management software, and electronic file sharing are other things to consider. Then don’t forget office supplies like pens, a comfortable chair, a good computer and a good internet connection, etc.
Put finances in order
Take this opportunity to make sure your financial flows are in position, whether they are loans or your own savings. It may also be a good idea to apply for business credit cards. These can be easy ways to keep track of your various business expenses and reap certain benefits. Some credit cards even allow you to benefit from certain types of financing.
It’s time to market your accounting business
With all that said and done, you can now move on to marketing, which can be a little more fun than the other aspects of building your accounting business.
Create a website
The first and most obvious thing to do is create a website for your accounting business. You’ll be able to onboard new clients more easily through an online interface. Additionally, people will check out your business more reliably if you have a website, then physically stop by your office.
Creating the website also allows you to perform virtual or completely online accounting services, which is the most common type of accounting these days.
Online advertising
Along with your website, you should consider online advertising. You can pay for advertising campaigns or send newsletters to various people in professional organizations who may need an accounting service.
Business Cards/Emails
Additionally, you can benefit from physical business cards or sending targeted emails to your friends and family. Business cards are a great idea if you interact with other business professionals in your everyday life.
How to become a virtual bookkeeper?
To be a virtual bookkeeper, an accounting degree is not necessary, but proficiency in the use of accounting software such as QuickBooks and basic accounting knowledge are essential. The key skill is having attention to detail, as the software can perform calculations but not identify contextual errors.
Ben Robinson, a Certified Public Accountant with experience since 1999, offers a course called Bookkeeper Launch which teaches not only accounting but also how to run an online accounting business. The course is comprehensive, including video lessons, downloadable materials, and a supportive community on Facebook. It covers both accounting and business skills, preparing the student to acquire their first client. The course is an opportunity for those interested in a flexible and lucrative career in virtual accounting.
To end
After all that, all that’s left is to start running your accounting business to the best of your ability. Good luck!
Do you want to know more about how to start a business? If so, you can also read our guide on how to market your business offline or how to get accounting jobs remotely Increase your business knowledge and make your accounting business a real success!
