What specific steps does a person need to take in order to make money as a bookkeeper?
First things first: they need to make sure, before they venture down this road, that bookkeeping is the right business for them. My free introductory class is meant to shed lots of light on the professional and business side of bookkeeping. Before investing a single dime or minute in pursuit of a bookkeeping business, one needs to make certain this is the right move.
After the student has made the determination that bookkeeping is a great fit, they need to get training. And, not just bookkeeping Xs and Os training; they need training on how to set up, market and grow their virtual bookkeeping business.
Our comprehensive course, Bookkeeper Launch, provides students with a turn-key solution to learning bookkeeping Xs and Os as well as the business and marketing side of the business.
Next, it’s up to the student to get to work doing the specific tasks we teach them. Bookkeeping should be marketed in a very specific manner. You can’t just hang a sign that says you’re a bookkeeper and expect a line of clients to form. You have to seek these clients. But, you never sell…you only educate your prospective clients.
How long does it take to make money as a bookkeeper and how much can a new bookkeeper expect to make? What about a more experienced bookkeeper?
This is one of the most common questions I get asked. It really is 100% dependent upon how much effort, time and care one put into starting and growing their own virtual bookkeeping business. Bookkeeping is NOT a get-rich-quick scheme. I half-jokingly say it’s a work-your-tail-off, rewarding, lifetime profession.
Some students want part-time/supplemental income; some want to replace a full-time income. Either case is not only a possibility; it’s also simple.
Some students wish to earn $10,000 per year which is around 3-4 clients.
Some students wish to earn $40,000 per year which is around 12-16 clients.
In either scenario, this is doable within one year IF they work the blueprint we give them. But, I want to emphasize that earnings are 100% dependent upon how much effort, time and care the new bookkeeper invests into their business. There is a short-term sacrifice that you make for a lifetime of benefit as a professional bookkeeper.
Accountants and bookkeepers work with numbers all day long. Therefore, those who do not like math, get confused easily when making simple calculations or are generally averse to number crunching should not apply.
Speaking of number crunching, that job duty is actually more common to bookkeeping than to accounting. Companies task bookkeepers with tasks such as recording journal entries and conducting bank reconciliations. As a bookkeeper, your attention to detail must be almost preternatural. Careless mistakes that seem inconsequential at the time can lead to bigger, costlier, more time-consuming problems down the road. You must be able to multitask. Rarely does a bookkeeper work on one big project for an eight-hour shift; rather, a typical workday involves juggling five or six smaller jobs.
As an accountant, you also have to crunch numbers, but it is much more important to possess sharp logic skills and big-picture, problem-solving abilities. While bookkeepers make sure the small pieces fit properly into place, accountants use those small pieces to draw much bigger and broader conclusions.
Bookkeeping from Home: Steps to Starting a Bookkeeping Business
Do you know what every business needs? Someone to do the books! If you’re a person who enjoys organization and possesses decent math skills, that someone could be you! I’m serious, bookkeeping can be a lucrative business: bookkeepers are always in demand, and bookkeeping itself is often something business owners don’t have enough time or confidence to do.
Sound interesting? Then read on to learn how to start your own bookkeeping business!
HAVE EXPERIENCE OR LEARN BOOKKEEPING.
While bookkeeping is absolutely a business you can start without any experience, it definitely helps to have previously worked in a money-related job. Whether you’ve worked as a small-scale accountant or as a company’s controller, that experience will go a long way in landing clients for your own business.
REGISTER AS A BUSINESS.
It’s important to do your business correctly from the beginning, especially when you’re handling someone else’s money. You must register your business with your state, either as a DBA (“Doing Business As”) or a business entity type such as a Limited Liability Company. While you absolutely could handle your bookkeeping business as a sole proprietorship, protecting yourself by becoming an LLC can keep you from being personally liable should your business be sued.
When you set up your business, you should also take steps to protect yourself. Have a P.O. box for any paper correspondence, so you can control who has access to your personal address. However, when choosing a Registered Agent for your business with the state, you’re not allowed to list a P.O box – in that case, it may be helpful to retain professional Registered Agent services from companies like CorpNet to protect your privacy.
REASSURE YOUR CLIENTS.
Even if you’re a fully virtual bookkeeper, you still need to inspire confidence in your clients that their private and personal information is being handled with the utmost security and confidentiality. When you’re working from your home, you must reassure your clients that you’re actively and carefully securing their data. Having an actual home office with a locking door (controlled access) is the best way to do this. If you don’t have the space for this, aim to have a desk with locking drawers where physical paperwork can be kept. Also, make sure your computer is password-protected, and that no one but you signs into it.
Set Up a Business Bank Account
One of the most important things that you can do is to separate your business finances from your personal finances. While most people think they should wait until the business starts to generate cash flow, I would disagree with that. It’s much easier to establish a business checking account now, before the cash starts to roll in. Another benefit to keeping personal and business funds separate is it supports the limited liability status. If you commingle your business and personal expenses, then you can lose the protection of your personal funds because there will be no way to distinguish what’s business and what is really personal.
Get the Right Accounting Software
Determining what software to use to manage all of the various aspects of your business can be an overwhelming task. To get you started, here is a list of the areas of your business for which you will need to decide what software tool to use:
- Bookkeeping/Accounting Software
- Practice Management Software
- Electronic File Sharing/Management