Most business owners don't realize how important bookkeeping is until they're in the middle of a financial crisis. Unfortunately, at that point, it's often too late to go back and fix things. That's why starting a bookkeeping business can be a wise decision. Not only will you help these businesses avoid financial disasters, but you'll also be able to build a stable business for yourself. And it doesn't have to be complicated. In fact, if you have a knack for numbers and are interested in business, a bookkeeping business could be the perfect opportunity for you.
As a bookkeeper, you would be responsible for maintaining financial records and ensuring that businesses stay organized. We will introduce 8 simple steps to help you get started.
Why Starting A Bookkeeping Business Is Worth It?
A bookkeeping business is one of the most profitable and in-demand small businesses today. The main reason for this is that:
- While some businesses may have accountants or financial staff, others outsource this work to bookkeeping businesses. As a result, there is a constant demand for qualified bookkeepers.
- Another reason for starting a bookkeeping business is that it requires little start-up capital. In most cases, you only need a computer and some basic accounting software. Additionally, bookkeeping businesses are easy to operate and can be run from home. This makes them ideal for entrepreneurs looking for a flexible and affordable way to start their businesses.
- Bookkeeping businesses offer a high degree of flexibility. Many bookkeepers freelance and set their hours. This allows them to work around their commitments and do as much or as they want. For many people, this flexibility is one of the main reasons why starting a bookkeeping business is worth it.
- Notably, a bookkeeping business also allows you to help people in their time of need. For example, many businesses struggle with financial problems at some point, and bookkeepers can play a vital role in helping them get back on track. This can be gratifying work, both emotionally and financially.
The Investment Needed To Start A Bookkeeping Business
As mentioned, starting a bookkeeping business requires very little start-up capital. In most cases, you only need a computer and some basic accounting software. Additionally, many bookkeepers choose to freelance and work from home. This allows them to avoid the overhead costs associated with traditional businesses, such as office rent and utilities. First, however, to discuss this further, let's look at the below-suggested points to get a gist of the requirements of starting this business.
1. Training and Certification
While bookkeeping is relatively simple, you will need some training to do it effectively. There are many online and offline courses available that can teach you the basics of bookkeeping. Alternatively, you can also get certified as a bookkeeper through one of the major accounting organizations, such as the American Institute of CPAs or the National Association of Certified Public Bookkeepers. While certification is not required to start a bookkeeping business, it will give you an edge over your competition.
2. Equipment And Software
As we mentioned, all you need to start a bookkeeping business is a computer and some basic accounting software. However, there are many other pieces of equipment and software that you may find useful. For example, a printer can be helpful for printing invoices and other documents. A scanner can also be useful for digitizing documents. Additionally, there are many specialized bookkeeping software programs available that can make your job easier.
3. Errors And Omissions Insurance
Errors and omissions insurance (E&O insurance) is a type of insurance that protects bookkeepers from liability if they make a mistake. This insurance is not required, but it is strongly recommended, especially if you plan on working with clients.
4. Software Updates
As with any type of software, bookkeeping software is constantly evolving. New versions are released regularly, and you must keep your software up-to-date to stay competitive. It's important to keep these programs updated, as new versions are often released to fix security vulnerabilities or add new features. For example, a recent update to QuickBooks added the ability to track inventory levels, making it even easier for small businesses to manage their finances.
5. Office Phone And Internet Service
A strong internet connection and a mobile phone are necessary if you work from home or in the office. You will need a reliable phone and internet connection to necessitate hassle-free communication with clients and accessing bookkeeping software.
6. Website Creation And Hosting
If you want to attract new clients, it's important to have a professional-looking website. Your website is often the first impression potential clients will have of your business, so it's important to make a good one. Fortunately, creating and hosting a website is relatively inexpensive and easy to do. You can use a platform like WordPress or Squarespace to create a website or hire a web designer to do it for you. Once your website is created, you will need to find a hosting provider to host it.
7. Business Registration
If you are operating your bookkeeping business as a sole proprietorship or partnership, you will need to register your business with the state where you operate. This is typically a simple process that can be done online. You will need to provide basic information about your business, such as your name, address, and contact information. Once you are registered, you will be able to get a business license and open a business bank account.
8. Emergency Fund
Lastly, it's important to have an emergency fund to cover unexpected expenses. When starting, you will likely need to reinvest significant profits into the business. However, as your business grows, you should save monthly money to cover unexpected costs. This will help ensure that your business can weather any storms that come its way.
These are just a few things you need to do to start a bookkeeping business. Following these simple steps can be up and running in no time.
8 Steps To Starting Your Own Bookkeeping Business
If you're good with numbers and have a head for business, then starting your own bookkeeping business could be a great way to earn a living. Here are 8 steps to get you started:
Step 1: Create A Business Plan
The first step to starting any business is to create a business plan. This will give you a roadmap to follow and help you stay on track as you get your business up and running. Your business plan should include the following:
- Your business goals
- Who is your target market is
- How will you reach your target market
- What services will you offer
- How will you price your services
- Your marketing strategy
- Your business structure
- Your start-up costs
- Your operating expenses
Step 2: Earn Your Certifications
While you technically don't need formal education or certification to start a bookkeeping business, obtaining certification can show potential clients that you're serious about your work and have the skills to back up your claims.
The most common bookkeeping certification is:
- The Certified Bookkeeper (CB) designation from the American Institute of Professional Bookkeepers (AIPB). To earn this designation, you must pass a four-part exam.
- Other certification programs are available, such as the National Association of Certified Public Bookkeepers (NACPB) and the Institute of Certified Bookkeepers (ICB).
- You can also go for Accounting Software Certification, which vendors like Intuit, Sage, and Xero offer.
While these programs are not as widely recognized as the AIPB certification, they are still valuable and can help you stand out from the competition.
Step 3: Choose A Business Structure
The next step is to choose a business structure. This will determine how your business is legally organized and how you will be taxed. The most common business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Once all of this is said and done, you will have to do two major tasks.
- Get A Business License
Once you have chosen a business structure, you must get a business license. This allows you to operate your business legally. Requirements for getting a business license vary from state to state, so check with your local government to find the necessary criteria in your area.
- Choose A Business Name
Now it's time to choose a name for your business. When choosing a name, you want something memorable and easy to spell. You also want to make sure your chosen name is available as a domain name so you can create a website for your business.
Step 4: Set Up Business Operations For Your Bookkeeping Business
Now that you have chosen a business name and structure, it's time to set up the day-to-day operations of your bookkeeping business. This includes getting a business license, opening a business bank account, and getting insurance. More to this list includes owning to the chores like:
Choose the accounting software you will use
Set up your office space
Buy supplies and equipment
Hire employees (if needed)
Market your business
Step 5: Fund Your Bookkeeping Business
Starting a bookkeeping business can be inexpensive, but you need some start-up capital to get things off the ground. The best way to fund your business is to use personal savings, take out a small business loan, or look into grants and other funding opportunities specifically for women-owned businesses.
Step 6: Open A Business Bank Account
The next step is to open a business bank account. This will help you keep your personal and business finances separate. Having a business bank account is important because it makes it easier to track your expenses and income easier, which is essential for tax purposes.
Step 7: Apply For A Business Credit Card
Another way to help keep your personal and business finances separate is to apply for a business credit card. This can help you buy office supplies or market your business. Just be sure to use your business credit card responsibly and only charge what you can afford to pay back.
Step 8: Get The Right Accounting Software & Tools
The next step is to get the right accounting software and tools. This will make it easier for you to keep track of your finances and manage your clients' books. Again, many different options are available, so be sure to research to find the best one for your needs.
In addition to accounting software, you will need other tools to run your business, such as a computer, printer, scanner, and paper.
Bonus: Market Your Business
The final step is to market your business. This can be done through online marketing, word-of-mouth, or print marketing. Whatever method you choose, your goal is to make your target audience understand what bookkeeping services are and how you are the best provider. Include your website address and contact information so potential clients can reach you.
How Can Fincent Help You Start a Bookkeeping Business?
Fincent can help you start a bookkeeping business in a wholesome and comprehensive manner. Here are some ways Fincent can aid you with your bookkeeping business. Have a look:
1. Automated Bookkeeping
Fincent can help you with your automated bookkeeping needs in several ways.
- First, Fincent can provide you with the software you need to keep track of your finances. This software is designed to be easy to use, help you stay organized, and save time.
- Second, Fincent can provide you with training on how to use the software. We offer both online and in-person training, so you can choose the option that best suits your needs.
- Finally, Fincent can help you troubleshoot any issues you may have with the software.
2. Record Keeping and Tracking
To begin with, Fincent offers a range of features to help you with record-keeping and tracking. Some of them are:
- You can track your income and expenses and any investments or debts you may have. This information can be vital in helping you to stay on top of your finances and make informed decisions about your money.
- In addition, Fincent can help you monitor your credit score and report any changes to the credit bureau. This can be extremely useful in helping you to avoid identity theft and keep your financial information safe.
3. Data Analysis and Reporting
While many small businesses may not need specialized financial software, it can be valuable for larger businesses with complex financial data. Fincent is designed to help businesses with data analysis and reporting. In addition, the software includes several features that can be customized to fit the specific needs of your business.
- You can use Fincent to track and analyze your company's spending, income, and profitability.
- You can also use the software to generate reports that can be used for tax purposes or strategic planning.
4. Integration With Other Software
Businesses today rely on an ever-growing number of software applications to run their operations. While this can provide a tremendous boost in efficiency, it can also create challenges regarding integration. Fincent has been designed to address this issue head-on, providing a robust set of tools for integrating with other software applications.
By integrating with Fincent, bookkeeping businesses can streamline operations, reduce costs, and improve decision-making.
- The software provides many features for integrating with other software applications, including data mapping, data synchronization, and data transformation.
- In addition, the software offers a flexible architecture that allows businesses to tailor their integration solution to meet their specific needs.
5. Bill Payment and Invoicing
Fincent can automatically generate invoices for your customers based on their purchase history. This can save you time and hassle when it comes to billing. In addition, the software can help you keep track of your payments to ensure that all of your bills are paid on time. The software can also remind you when a payment is due so that you don't have to worry about missed payments. In short, Fincent financial software can help you save time and money by streamlining your bill payment and invoicing processes.
6. Tax Preparation Assistance
When it comes to tax preparation, most people dread having to deal with it. Figuring out which forms to fill out and which deductions to take can be confusing and time-consuming. However, with Fincent, you can get the help you need to make tax preparation a breeze. Fincent offers a variety of features that can assist you in completing your taxes, including:
- Built-in calculator
- Support for electronic filing and step-by-step instructions.
- In addition, the software is constantly updated to ensure compliance with the latest tax laws.
As a result, you can be confident that you are taking advantage of all the deductions and credits you are entitled to. In addition, with Fincent, you can get the assistance you need to make tax preparation a breeze.
7. Automatic Data Import
If you've been looking for a way to help you with automatic data import, then Fincent is for you! Fincent is a web-based application that allows you to automatically import your financial data from your bank, credit card, and investment accounts. This means that you won't have to enter your transactions manually, and you can be sure that your data is always up-to-date.
Additionally, Fincent can help you track your spending, create budgets, and generate reports. So whether you're a small business owner or an individual investor, Fincent can help you manage your finances more effectively.
8. Customizable Reports
With customizable reports, you can track your income and expenses, see where your money is going, and set goals for future spending. You can also use Fincent to create a budget and plan for future financial needs. In addition, Fincent can help you keep track of your investments and monitor your credit score. With all of these features, Fincent can help you take control of your finances and make informed decisions about your money.
9. Secure Data Storage
Fincent is a cloud-based software application that helps you manage your finances securely. One of the ways it does this is by storing your data in a secure, encrypted format. Only you can access your data, and it will be very difficult for anyone else to hack into your account.
In addition, Fincent also offers two-factor authentication, which adds an extra layer of security to your account. If someone does manage to guess or steal your password, they will still need access to your phone or email account to log in. As a result, Fincent provides high security for your data, making it an ideal choice for managing your finances.
10. Customer Support
Fincent can help you keep track of your finances and provide customer support when you need it.
- The software is designed to help you manage your finances by keeping track of your income and expenses.
- It can also help you keep track of your customer support by providing you with a list of frequently asked questions.
- In addition, the software can help you keep track of your payments and receivables.
Using Fincent, you can be sure that you are providing the best possible customer support.
We have comprehensively discussed the many aspects of a bookkeeping business and what it takes to start one. From the need for bookkeeping services to the various steps involved in mainstreaming one, we have it all covered! So if you're looking to start your own bookkeeping business, these 8 simple steps will get you on the right foot.
Moreover, Fincent can help you manage your finances by providing you with various features, like - tracking your income and expenses, creating budgets, generating reports, and more.
If you're looking for a way to take control of your finances and make your bookkeeping business a table-turner, then Fincent is the right choice! So, what are you waiting for? Start your Bookkeeping Business with Fincent right now!
Fincent: Your Business's Personal Financial Wizard - From Bookkeeping to Tax Filing