Are you thinking of starting an accounting business? Accounting firms are booming these days with the amount of data entry and financial record keeping that is required. Accounting can even be quite profitable, since everyone needs accounting and will always need it; the service really never ceases to be valuable.
If you want to learn how to start a bookkeeping business, you’ll want to consider the following outline to get it right the first time.
Become a Certified Bookkeeper
First, you’ll need to establish that you have credibility within the bookkeeping business if you want to win long-term clients. Chances are, you’re only thinking about starting your own bookkeeping business if you’re already an accountant. But if not, then you should seek accounting certification before starting the business.
You can do this a couple of different ways. The American Institute of Professional Accountants offers a path to certification, which involves more than 3,000 hours of work experience and study.
The National Association of Certified Public Accountants is another path, which involves passing an exam after you’ve earned an associate’s or bachelor’s degree in accounting.
Make a business plan for your accounting business
After you’ve earned your certification as a professional bookkeeper, 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 it will offer, and a projected balance sheet.
Basically, think of everything that could affect your business performance 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 start-up 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 money up front as something like a contracting business, but you’ll still need some money to buy accounting software, like Wave, and other supplies you need to perform bookkeeping services.
You may also need to rent office space or hire employees. Work out your financing beforehand and determine if you have the cash saved to pay for things yourself or if you need to borrow from the bank.
Register your accounting business
If your financing looks good, you can go ahead with incorporating your bookkeeping 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 in case 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 bookkeeping 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 kind of service you offer and your name to be easy to remember when looking for someone to perform bookkeeping services. ” Sanchez Accounting ” is a decent example, although you can easily be more creative while still getting 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 answer multiple customers 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 business funds totally separate.
A business mailing address is another required aspect to consider at this point. For this reason, renting a PO Box from your local post office is cost-effective, but may seem a bit less professional than owning 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 long. But if you decide to set up an office in a different building or location, this can take a few weeks.
You don’t want to skip insurance, even as an accountant. There are certain types of liability insurance that you should invest 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 correct materials or software that you need to carry out your bookkeeping 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 advantage of this opportunity to ensure that 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 earn certain benefits. Some credit cards even allow you to take advantage of certain types of financing.
It’s time to market your accounting business
With all said and done, you can now move on to marketing, which can be a bit more fun than the other aspects of building your bookkeeping business.
Create a website
The first and most obvious thing to do is to create a website for your accounting business. You’ll be able to onboard new customers more easily through an online interface. Also, people will more reliably verify your business if you have a web page, then physically stop by your office.
Creating the website also allows you to perform accounting services virtually or completely online, which is the most common type of accounting these days.
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.
Additionally, you can take advantage of 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.
After all that, all that’s left is to start running your accounting business to the best of your ability. Good luck!