Looking to start a bookkeeping business? You’ve come to the right place.
For those unfamiliar with bookkeeping, it means keeping track of business operations and financial transactions. As this is crucial for any accounting practice, starting a bookkeeping business is wise.
Focusing on a particular accounting function, like bookkeeping, narrows down potential clients and puts your firm in a position of expertise, especially for accounting firm owners who want to diversify their ventures.
Our guide contains pertinent points to consider when starting a bookkeeping business, from accounting software for bookkeepers to the best possible business model for your company. With our list, you can provide your prospective clients with top-quality services and keep your bookkeeping business profitable for years to come.
Why Start a Bookkeeping Business in the First Place?
Bookkeeping businesses provide services to small business owners, helping them manage their financial statements and stay on top of their business finances. This includes financial record-keeping, generating financial statements, and making accurate financial projections. You can also operate from anywhere, like in the comfort of your home, reducing overhead costs and providing work-life balance for your employees.
Bookkeeping businesses can generate income through hourly or fixed-rate services. Your bookkeeping business can also offer additional services, such as tax preparation and financial planning. You can also generate income through affiliate marketing and selling accounting software as well.
If you want to start a bookkeeping business, then keep reading to gain valuable insights on establishing your business structure, managing business expenses, and securing bookkeeping clients, among other important business elements.
Tips to Start Your Own Bookkeeping Business
1. Establish a business name for your bookkeeping business
Creating a business name is where some firm owners take their sweet time — because they want to make sure that no one has taken their business name and face unwanted legal consequences in turn. A successful bookkeeping business name is state-regulated, SEO-driven, and authoritative.
The most common approach to this is using the founders’ last names (as seen among the Big 4 accounting firms as well) for your official business name. You can try other approaches to naming your bookkeeping business, like those based on location or origin of your bookkeeping firm.
You can also use portmanteaux like FORVIS (which means forward vision) for your business name. Especially for stylising, you can use bicapitalisation to join two or more last names like RubinBrown LLP and BerryDunn (typically with a longer registered company name). Additionally, you can join (and eventually, trademark) words related to bookkeeping, like “BooksPros” or “CountWise” for your bookkeeping business.
2. Decide on your bookkeeping business pricing setup
In business, we have four main pricing setups: fixed fees, hourly billing, value-based pricing, and hybrid models. Each structure has its own strengths and blind spots, so it’s up to those looking to establish a bookkeeping business to do enough research and find what fits the unique dynamics of their business operations perfectly.
Especially for bookkeeping businesses, below are some commonly used pricing setups for firms looking to offer 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, as they can set the budget for getting your bookkeeping services.
Remember to be mindful of scope creep when it comes to the client’s needs — which is preventable when there is a clearly set service scope. This prevents unintentional underpricing and overworking on the bookkeeper’s part. As a business owner, you should see to it that the price list of your bookkeeping business is fair, up to date, and adjusted accordingly.
Typically tracked by accounting billing software, the hourly billing structure is also a good setup especially for a beginner bookkeeping business. In this pricing setup, the amount that’s charged to clients depends on the hours of work that their bookkeepers put in to complete their tasks and projects.
If you decide to incorporate the hourly pricing setup into your bookkeeping business plan, then you might want to consider the unpredictability of the cost per hour, which could make your clients a bit reluctant to work with you. On top of this, hourly pay for your bookkeeping firm may defeat the purpose of process improvement tools like accounting workflow software.
To avoid scope creep that’s tied with hourly charging, clearly defining the scope of services is crucial. Like the abovementioned fixed fees, service scope for hourly billing prevents bookkeeping startup owners to pay beyond their capabilities.
Based on the amount your client is willing to pay, value-based pricing for your bookkeeping business services can work as well — 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.
Note that determining the value of your bookkeeping firm will require you to exert effort in understanding and analysing the industry. Knowing only the basics will not suffice, so take caution about this pricing setup. Try partnering with bigger industry names, like established bookkeeping firms, or authority figures like accounting influencers or pages. By doing this, you increase the perceived value of your bookkeeping business.
If you’re wondering whether you can combine these pricing setups, then the answer is yes, you absolutely can! Especially if you find using multiple strategies to work wonders for your bookkeeping company, then go right ahead. A flexible pricing setup appeals to clients since certain projects require ad hoc tasks and entail additional payments, while some only require fixed rates.
With these pricing tips, you can start a bookkeeping business without worrying if you’re getting the shorter end of the stick. Establishing a pricing setup that best fits your bookkeeping firm maximises profitability and benefits most parties involved.
3. Develop the branding of your bookkeeping firm
Most firm owners would want to know how to start a bookkeeping business and present it to their target clientele in a way that’s uniform and consistent. With this being said, you would need to develop the branding of your bookkeeping firm, and there are certain steps to do this successfully.
You can get started by establishing the brand assets of your bookkeeping firm — keep your colors, fonts, logo, and content (be it offline or online) consistent throughout every platform you choose. Additionally, your bookkeeping business must also have a unique value proposition that sets it apart from its competitors, which you can highlight in your bookkeeping firm’s mission and vision statements.
4. Craft a solid bookkeeping business plan
If you want to start a bookkeeping business, a solid business plan is necessary to give some structure to company roles and operations. You can surf the internet for bookkeeping business plan templates for your bookkeeping business’s needed structure. Ensure you incorporate important sections like the confidentiality agreement, sales and marketing strategies, projected profit and loss charts/tables, and financial plans and forecasts.
On top of this, your bookkeeping business plan should include essential summaries like your company, web plan, and market analysis summary, among others. While there’s no one uniform or exact formula for your business plan, your bookkeeping firm needs a certain structure to base its final business plan on, which is crucial for your workflow, daily operations, partnerships, and overall stability as a bookkeeping company.
5. Acquire a bookkeeping business license
When you start a bookkeeping business, it’s imperative to secure the approval of accounting authorities. If you want to establish a good reputation among your prospects and bookkeeping clients (and eventually become an authority figure in the bookkeeping industry), your bookkeeping business needs a license to operate.
Getting the stamp of approval from accounting authorities (and the government) helps your bookkeeping firm earn more credibility and communicate an image of reliability to your target audiences. Aside from these, getting licensed makes other business-related processes simpler, easier, and, most importantly, legal. Overall, acquiring a bookkeeping business license solidifies your bookkeeping company in terms of image and public trust.
6. Choose a fitting business structure: sole proprietorship or Pty Ltd
When you operate under this business structure, you, as the business owner, have no legal separation from your bookkeeping practice. When it comes to taxation, you’re (a) registered as an individual, (b) your filed taxes will all fall under the personal tax category, and (c) 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.
7. Use bookkeeping software for your day-to-day operations
In understanding how much technology has advanced today, accounting software (specifically bookkeeping software) is now essential for bookkeeping businesses to boost efficiency and speed up tasks that are otherwise time-consuming. When you start a bookkeeping business, high-quality accounting software helps streamline and automate many complex financial processes.
With accurate and up-to-date financial data, bookkeeping software will elevate your accuracy and productivity over other bookkeeping businesses that are otherwise more traditional and still unopen to automation. After all, bookkeeping software ensures that transactions are recorded consistently and efficiently, eliminates errors caused by manual entry, and reduces the risk of costly mistakes that could impact the overall financial health of your bookkeeping business.
Bookkeeping software also offers advanced reporting capabilities that provide insights into a company’s financial performance, helping bookkeepers analyse trends, identify areas for improvement, and advise bookkeeping clients on future strategies.
Do You Have What It Takes to Start a Successful Bookkeeping Business?
We’ve given you key insights and strategies for navigating the intricacies of running a bookkeeping business. As we’ve established, it’s good to have a comprehensive understanding of financial management, accounting principles, and tax regulations, among other things involved in bookkeeping before you start a bookkeeping business.
With our tips on how to start a bookkeeping business, you can learn how to cultivate strong client relationships, streamline your operations through efficient solutions, develop a sound marketing plan to attract new business partners, truly understand the pain points of your target market, and offer feasible and cost-effective solutions to them, and offer exceptional customer service to build a good reputation within your field and across multiple industries.
So, can you start your business successfully? While this mostly depends on how good your team is, take it from a top accounting firm owner to share experiences running a firm and navigating the demanding and ever-changing accounting industry.
Should You Work with an Outsourced Team for Your Bookkeeping Business?
Getting an outsourced bookkeeper can change your accounting firm and its day-to-day operations for the better. With outsourcing, you don’t just significantly reduce costs — you also increase your capacity, make more room for scalability, and work with a globally competent accounting team that provides your bookkeeping clients with top-tier bookkeeping business services.
While there are many longstanding misconceptions about outsourcing, case studies and client testimonials from all around the globe prove otherwise. On top of this, there are partner bookkeeping companies that you can collaborate with to ensure that the quality of work (including outputs, services, and other offerings) of your outsourced bookkeepers remain up to standard, like TOA Global.
Bookkeeping Made Simple with TOA Global
Quality outsourced bookkeeping services have never been more accessible. With our roster of seasoned outsourced bookkeeping professionals, TOA Global takes the load off your bookkeeping business and its in-house team while allowing you to focus on growing your firm exponentially.
Start outsourcing with TOA Global today. Book a chat with us for a no-charge, no-obligation consultation.
