Every successful business starts with the right launchpad, and this guide is here to fuel yours.
If you’re wondering how to start a bookkeeping company, this blog will walk you through the steps to building a stable and scalable business that’s ready to soar. From choosing your business model to assessing prospective clients, we’re here to help you boost momentum and keep your bookkeeping business profitable for many years to come!
So, are you ready to skyrocket to success? Let’s jump into it.
Key Takeaways
- There is a strong demand for bookkeeping services in Australia and New Zealand.
- Small business owners often require bookkeeping services, including recording financial transactions, processing payments, managing financial records, and preparing financial statements.
- The estimated cost of starting a bookkeeping business ranges from $8,000 to likely much more, depending on your specific business needs.
- Choosing your business structure can cost anywhere from $100 upwards. Meanwhile, acquiring an Australian Business Number (ABN) is free, but the basic company registration fee starts at $474.
- Using accounting software like QuickBooks Online or Xero to track business expenses, handle invoicing and billing, and automate day-to-day processes can cost anywhere from $60 to $90 per month.
- Your business plan includes a company description, a marketing strategy targeting both existing and prospective clients, a research-backed competitive analysis, an operations plan, and financial projections, among other key elements.
- Starting a virtual bookkeeping business is an ideal business model because it allows you to operate from anywhere, reduce overhead costs, and provide a work-life balance for your employees.
Table of Contents
How Much Does It Cost to Start a Bookkeeping Business?
The cost to start a bookkeeping business typically ranges from a few hundred dollars to upwards of $8,000 (AUD), depending on the chosen approach and level of investment. Setting up a computer and your preferred basic online accounting software can cost as little as $3,000, while a more comprehensive setup with additional tools and office space could reach $13,800 or more.
Why Start a Bookkeeping Business in the First Place?
One of the main reasons to start a bookkeeping business is that there will always be a market for it: the Australian payroll and bookkeeping industry is valued at $17.5 billion (AUD) in 2024, with bookkeeping services projected to reach $32.4 billion by 2033.
This demand is robust among small business owners, especially when it comes to managing their business finances. Bookkeepers play a crucial role in helping firms manage their day-to-day transactions, maintain accurate financial records, prepare financial statements, and make informed financial projections.
Some benefits of starting a bookkeeping business include low startup and overhead costs, high and uncapped income potential, scalability, and high client retention rates.
Launch Checklist: Essential Steps to Start a Bookkeeping Business
Setting up your own bookkeeping business for success can be tricky if you don’t have a solid navigation system. So, whether you’re a brand-new firm owner or an industry veteran, our 7-step launch checklist is the only thing you’ll need to provide remarkable, top-quality bookkeeping services, aim for the stars (i.e., your target market), and make sure your business grows alongside your vision!
Ground Support: Establish a Credible Business Name
A good business name is state-regulated, SEO-driven, and authoritative. As a firm owner, it’s your duty (or that of your trusted team members) to ensure your business name isn’t already in use to avoid potential legal issues down the line.
Consider the accounting giants—Deloitte, EY, PwC, and KPMG—all named after their founders. While that’s a classic route, you’re not limited to tradition. You can also explore business names inspired by your location, your firm’s origin story, or a unique brand vision.
If you’re taking a more creative route, using portmanteaux like FORVIS, which means “forward vision”, also proves effective, as well as bicapitalisation, joining two or more last names like RubinBrown LLP or BerryDunn, and utilising bookkeeping jargon, like “BooksPros” or “CountWise”.
Trajectory: Setting the Right Pricing Structure
A smart trajectory ensures your pricing stays aligned with your business goals.
In general, there are four primary pricing models in businesses: Fixed fees, hourly billing, value-based pricing, and hybrid models. Each structure has its own strengths and blind spots, so it’s up to you to do enough research and find what fits the unique dynamics of their business operations perfectly.
For bookkeeping businesses, the following are the most commonly used pricing setups for firms offering bookkeeping services.
Set to prevent any increases or decreases, fixed fees are typically on a monthly or yearly basis for bookkeeping services. The predictability of fixed pricing makes your bookkeeping business more attractive to clients.
Remember to be mindful of scope creep when it comes to the client’s needs, which can be prevented by having a definite service scope via a bookkeeping contract agreement. This prevents unintentional underpricing or overworking your bookkeeper. As a business owner, ensure that your price list is fair, up-to-date, and regularly adjusted to reflect current market conditions.
Typically tracked by billing software, the hourly billing structure is also a good setup, especially for a beginner bookkeeping business. In this pricing setup, the amount you charge clients depends on your bookkeepers’ hours of work.
If you’re opting for hourly pricing, consider the unpredictability of the cost per hour, which may deter your clients from working with you. Hourly pay for your bookkeeping firm may also undermine the purpose of process improvement tools, such as accounting workflow software.
To avoid scope creep, clearly defining the scope of services is crucial. As was discussed regarding fixed fees, the service scope for hourly billing prevents bookkeeping startup owners from paying beyond their capabilities.
Value-based pricing is based on the amount your client is willing to pay. This setup can put you and your client on the same page while also setting the benchmark for how your bookkeeping firm is perceived in the accounting industry.
Valuing your own bookkeeping business will require you to understand and analyse the industry from the inside out. Some quick ways to boost your value include partnering with larger industry names, such as established bookkeeping firms, or collaborating with authority figures like accounting influencers or reputable pages.
If you’re wondering whether you can combine these pricing setups, the answer is yes. A flexible pricing setup appeals to clients because it provides clarity and customisation to fit the unique needs of each client, removes the pressure of overcommitting too soon, and supports long-term partnerships as well.
Guidance System: Create Your Branding and Marketing Strategy
In rocketry, the guidance system determines the rocket’s direction, stability, and ultimate destination. The same applies to branding and marketing—think of these as the guidance system of your business, keeping you on course and aimed at your ideal audience.
Start by establishing your brand assets and ensuring consistency in your colors, fonts, logo, and content across all platforms. Make sure that your bookkeeping business has a unique value proposition that’s visible, consistent, and distinct from its competitors.
You can highlight this in your mission and vision statements, conduct social media campaigns to spread the word, or adjust your plans in response to market shifts or client needs.
Satellite View: Map Out a Business Plan
What do earth observation and businesses have in common? A need for a comprehensive perspective.
Just like how we need a satellite view for observing changes and tracking patterns, you need a solid business plan—a summary of your needs, goals, and strategies for success and growth, as well as structure to the company’s roles and operations.
Ensure that you incorporate key sections into your business plan, including your company description, a marketing strategy targeting both existing and prospective clients, a research-backed competitive analysis, an operations plan, and financial projections.
While there’s no one uniform or exact formula for your business plan, you need at least a specific structure to base your final business plan on, which is crucial for your workflow, daily operations, partnerships, and overall stability as a bookkeeping business.
Launch Clearance: Get Your Business Licence in Order
Your rocket won’t take off if there’s no launch clearance—in other words, you need the authorities’ stamp of approval for your bookkeeping business.
Obtaining a licence makes your business-related processes simpler, easier, and, most importantly, legal, while also communicating your firm’s credibility and reliability to both your target market and the broader public.
Here are some essentials when acquiring a licence for your own bookkeeping business:
- Get an Australian Business Number (ABN) via the official Australian Business Register (ABR) website
- Lodge your business activity statements (BAS) and register your goods and services tax (GST) with the Australian Taxation Office (ATO)
- Choose an appropriate business insurance package
Mission Framework: Find the Right Business Structure
Like any bookkeeping firm, you need a solid business structure tailored to your company’s type, size, and scale. While there are many structures, the two types listed below are among the most common.
Sole Tradership
When you operate under this structure, you, as the business owner, have no legal separation from your business. When it comes to taxation, you’re:
- Registered as an individual
- Your filed taxes will all fall under the personal tax category
- And all your profits are taxed on an individual level.
In short, you’re responsible for your whole business entity, including debts and legal claims, among other aspects.
Proprietary Limited (Pty Ltd)
Commonly used by small to medium-sized businesses, Pty Ltd or proprietary limited is a private company that doesn’t sell shares to investors. This business structure also limits the liability of its shareholders, meaning they’re not personally liable for the company’s debts beyond their initial investment. Pty Ltd companies should have:
- At least one director who resides in Australia
- Must adhere to strict regulations set out by the Australian Securities and Investments Commission (ASIC)
Mission-ready: The Right Bookkeeping Software
Accounting software, especially the ones designed for bookkeeping, is not just a bonus but a necessity to boost efficiency and productivity, help streamline and automate complex financial processes, and enhance accuracy in your bookkeeping tasks and projects.
This is because bookkeeping software can detect and eliminate errors from manual entry, allow collaboration between team members, and even provide insights into a company’s financial performance. These insights enable bookkeepers to analyse trends, identify areas for improvement, and advise bookkeeping clients on future strategies as well.
BONUS! Offshore Teams: Your New Power Reserves?
We’ve all heard of misconceptions about outsourced bookkeepers—security compromises, cultural misalignments, language barriers, and timezone differences, among others.
However, what most people aren’t aware of is that when done correctly, offshoring increases your capacity, allows for scalability, enables you to focus on high-margin tasks, and offers savings that bookkeeping clients of all types will find hard to refuse.
While we can’t address all existing outsourcing myths in one go, let this client success story encourage you to take the first step to outsourcing:
“It takes a great deal of courage to take the first step, and then not only take the first step, but also to have a great team and a great partnership.”
Dinesh Nanayakkara, SSAud | Director of Strategic Partnerships, DS Audit Services
Fuel Your Takeoff with Outsourced Bookkeepers
Outsourced bookkeepers aren’t just your power reserves—they’re your secret weapon to skyrocket to success! TOA Global goes beyond bookkeeping services and provides long-term talent solutions to help you focus on your payload, scale at warp speed, and reach your moonshot goals.
Ready for takeoff? Book a chat with us for a no-charge, no-obligation consultation.
