How to Start a Bookkeeping Business

Bookkeeping, in business, is the recording of financial transactions, and is part of the process of accounting. Transactions include purchases, sales, receipts and payments by an individual or organization. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper and files forms with government agencies. There are some common methods of bookkeeping such as the single-entry bookkeeping system and the double-entry bookkeeping system. But while these systems may be seen as "real" bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.

Proper bookkeeping is one of the most critical tasks for a small business. Good records are necessary for the preparation of tax returns, Internal Revenue Service (IRS) audits, insurance audits, and bank financing. Therefore, it is important to get started with a good accounting system, and maintain your backup records in a logical manner. Some new business owners think they must hire a costly CPA or a full-time bookkeeper, but this is simply not the case. In fact, anyone can keep proper records by keeping in mind a few simple principles.

Every business needs someone to keep track of its income and expenses. If you start a bookkeeping service, you can earn money by providing your services to businesses that do not employ an in-house bookkeeper. This is a business you can run from home or from a commercial location, starting out with basic office equipment, office supplies and bookkeeping software. If you have bookkeeping know-how, starting this business may be easy. The hardest part may be creating a business plan and finding your first client.

Develop an Effective Bookkeeping Business Plan:

Things Needed

Computer
Internet access (recommended)
Telephone
Printer/Scanner/Copier
Accounting software
Desk
Chair

Instructions

Step 1

Learn the bookkeeping business. If you have not already worked as a bookkeeper, take accounting classes online or at your community college. You don't have to have a degree or be a Certified Professional Accountant to be a bookkeeper, but an educational background will certainly help.

Step 2

Every business, no matter how small, should open a separate bank account for business transactions. This way, all business transactions can easily be tracked through one account. Business owners should refrain from making personal purchases from their business accounts and business purchases from their personal accounts.

Step 3

Purchase bookkeeping software that is easy to use, inexpensive and compatible with your computer. The days of writing out every deposit or purchase order are long gone, and there are many software programs to help you get your bookkeeping business started. You can find bookkeeping software on the QuickBooks website.

Step 4

Ask friends, family and colleagues whether their workplaces require auditing or bookkeeping services. Temporary projects can help your bookkeeping business build a reputation and gain references.

Step 5

Engage in creative advertising as you start your new business. Guerrilla marketing efforts, like enthusiastic street teams or handing out coupons in comical outfits, can draw in younger clients looking for a cutting-edge bookkeeper. These efforts can be inexpensive and may create positive buzz about your business in the community.

Step 6

Hire a small, permanent staff at the start of your business. A core group of accountants and financial planners can help to ensure a high level of accountability in early projects.

Step 7

Find accounting and business interns at your local university. These students may be willing to work several days a week to help you with specific bookkeeping projects or general administrative tasks, like filing. With a solid staff of interns, you can get more work done and possibly find a new employee as your business expands.

Step 8

Apply for small business grants through state and federal agencies. Many of these grants are available for entrepreneurs who are working in a growing field or utilizing high-tech solutions. You should seek grants if you are planning on expanding your IT network or creating a trial position within your company.

Step 9

Set up your office. You will save a lot of money on overhead if you work out of your home, however, you still may want to rent a commercial office location. Either way, you will need a desk, chair, computer, a printer/scanner/copier, your software, a telephone and Internet access if you choose an online accounting program.

Step 10

Price your services. This will depend on your level of experience, competition and your target market. Call other bookkeepers to see what they charge. If it makes you feel more comfortable, call bookkeepers in other towns.

Step 11

Market your services. Design a logo or have one designed for you that goes with your business name. Put this logo on all of your promotional materials and correspondence. Purchase business cards and hand them out at functions and other social events. Whenever someone asks for your phone number, hand them a business card. Go to meetings of the Chamber of Commerce or other local business organizations and answer questions or concerns about bookkeeping issues or tax preparation, if this is something you'll be doing. Send press releases to your local newspapers, radio and TV stations, especially at tax time. Give useful information that editors can put in stories about financial issues and they may call you for a quote.

Step 12

Design a website or blog and continue your marketing efforts by writing articles about various bookkeeping issues. Comment on other articles on websites to help drive traffic to your site. Make sure you have plenty of contact information on your site, so that potential clients can reach you easily.

Reference