8 Easy Steps To Starting an Online Bookkeeping Business

08/09/2022 07:52:59 +0000
Starting an Online Bookkeeping Business
We cannot begin to describe just how beneficial it is to work from home, especially if you have an online business. Running an online business has many benefits, and being your own boss, working on your own time, and setting your own schedule are just some of them.

However, of course, you want to start an online business where your strengths and skills are.

So, if you know about bookkeeping and are good with numbers, starting an online bookkeeping business could be an option. This article discusses step-by-step instructions on starting an online bookkeeping business.
Starting an Online Bookkeeping Business: Step by Step
This is a simplified list of steps to follow that will allow you to start your own bookkeeping business.

1. Acquire Your Certifications

First, you must gain credibility and trust with potential clients. People need to know that their bookkeeper knows what they are doing. Therefore, you first need to get the most important certifications that prove to people that you are the real deal. As we discuss below, there are three main types of certificates that you will want to look into getting.

You can become a certified bookkeeper, which isn't too hard to do, as you don't need a formal education. Choose one of the larger and more trusted bookkeeping certification agencies.
There are two main options: the American Institute of Professional Bookkeepers and the National Association of Certified Public Bookkeepers. If you have no formal education, the former is best.

You should also acquire an accounting software certification with the accounting software of your choice or possibly with multiple programs. Your clients want to know that you can use the software needed to take care of their books. Some of the best programs include QuickBooks, FreshBooks, and Xero.

Although you don't need to be certified to sign a tax return for a client, it will help build trust. Therefore, we recommend becoming either a certified tax expert or working with one. Of course, you can always become an enrolled agent through the IRS, which is excellent for doing tax returns if you aren't a CPA.

2. Create Your Business Plan

Ok, so you know you want to become a virtual bookkeeper, but this still requires you to have a solid business plan; no business starts without a good plan. When you create a business plan, you must consider every aspect of your business.
You need to consider how well qualified you are, how you will market your services, what your competition is like your target audience, how you plan to fund your business, where your profits will go, etc.
Every business plan should include a few vital elements, including an executive summary, an overview of the company, an analysis of the competition, a program for marketing, the cost to get started, and financial projections.

These constitute the bare minimum your business plan should include. Simply put, don't start any business without first mapping out all the details.

3. Organize and Register Your Bookkeeping Business

The next step is to register and organize your business. You want to ensure that your business is established as a legitimate entity, which will help reduce or eliminate liability on your behalf if you run into legal trouble. Finally, you must develop your business at all three government levels, including federal, state, and local levels.

The first thing is select the name of your business. Although it can be fun, it can also be stressful. The name of your business should be clear and to the point; when people hear the name of your business, they should know what it is about from the name alone.

Don't get too fancy; be clear and to the point. Try to link your name to something that people already know, such as the city where you live and operate; get input from others, and then test the name on potential customers. Getting feedback from others can be highly beneficial.

After that, select your business's structure. There are four main business structures to choose from: a corporation, an LLC or limited liability company, a partnership, or a sole proprietorship.

We recommend doing some research to determine the best business structure for you. However, a sole proprietorship should be more than satisfactory if you just run a small bookkeeping business from home. However, being an LLC or corporation will be best if you plan to hire employees.

4. Take Care of Business Operations

The next step is to set up all your bookkeeping operations, such as a mailing address, business bank account, insurance, and other essentials. But, first, let's look at what you'll need.

You should set up an answering service so you can get back to customers if you have too many and can't pick up the phone. An answering service can transfer clients to a text, phone, or email service that will care for their needs.

You should set up a business bank account to keep your personal finances separate from business finances. This is something you should do before you start the business.

Use a business mailing address, especially if you work from home. This makes you seem more professional if you work from home.

Then, set up bookkeeper insurance. If something goes wrong, you want to be fully covered.
Starting an Online Bookkeeping Business

5. Get the Right Accounting Software

In today's age, bookkeeping is done with the right kind of software. So, what type of bookkeeping software do you need to get started?

First, you will need bookkeeping software, and there are many to choose from. QuickBooks is considered one of the very best.

Then, you will need payroll software to efficiently process payroll for your clients.
Practice management software is highly recommended, as this will allow you to keep track of the work you are doing for clients and may also give you direct access to your clients' books.

An electronic file sharing system will also be helpful, so you and your clients can easily share documents.

6. Get Funding

You may not need funding to set up your online bookkeeping business if you have the money. However, if you don't, you will need to find a way to fund your business.
Generally, this involves applying for business credit or a small business loan at a local bank. The bottom line is that you will need money to start your online bookkeeping business.

7. Create Your Home Office Space

When starting, always use a home office instead of renting office space, as it will be much cheaper. That said, you should meet with clients in their offices or do virtual meetings. Inviting clients to your home does not look professional.

Remember that home office expenses are tax deductible, so that's a bonus. If working from home is not an option, using a virtual office space is your next best bet. Another is that you should have a separate business phone number; using your personal number is not recommended.

8. Market Your Online Bookkeeping Business

Finally, market your business to let people know about you. This can take many forms, but the bottom line is that you need to get the word out; people can't come to you for their bookkeeping needs if they don't know you exist.

Also, you should set up an official business webpage, create a snappy LinkedIn profile, create other social media business pages, etc.
Then, once your business gets going, you could use paid advertisements to increase your reach, whether on social media or search engines.
Final Thoughts
This is how to start an online bookkeeping business in eight simple steps. Now that you know the basics, you can start making money by looking after other people's finances.
About the Host
Sophie Howard is the founder of Aspiring Entrepreneurs, a community designed to help people develop the skills and confidence to build a business and a life that serves them. Sophie began online in 2013 with an Amazon firm, which she sold for more than $1 million in 2015.

Sophie has lectured on stages all around the world, encouraging and teaching other ambitious entrepreneurs. She has established instructional programs educating thousands of students how to sell online, in addition to releasing over 1000 products.

Sophie has also written a book titled "Aspiring Entrepreneurs: A Guide to Finding Your Best Path to Financial Freedom."
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