How To Start a Bookkeeping Business From Home

The world we live in is absolutely crazy. I mean, I have days where I just can’t fathom that I’m able to work from the comfort of my own home, (mostly) on my schedule, and the best part…make decent money doing it. As a single mom, I couldn’t ask for more. As I type this, one of my kids is sick. But I don’t have to worry about taking a day off of work or leaving her home alone.

So, how did I get to this amazing place? Well, first, let’s start with my disclaimers:

My first disclaimer is that while I do make over six figures with my bookkeeping business, I do have years of bookkeeping experience and then a recent accounting degree to help add to my real-world experience and gain more credibility with my clients. That being said, if you’re willing to learn, you have some grit to you, and you provide high-quality work, I don’t doubt you could make the same money, or even more!

Another disclaimer is that it takes a LOT of work to get to that place. I hear over and over again from new clients that good bookkeepers are hard to come by. Knowing how to set yourself apart as a “good bookkeeper” takes a lot of introspection, hard work, and learning. Bookkeeping is so much more than data entry, especially with the rapid pace at which software is evolving. Part of what sets me apart from other bookkeepers in my area is that I take the time to understand other software systems that integrate into Quickbooks.

My last disclaimer is that the below list is by no means a comprehensive list. These are just some of the basics that you’ll need if you’re exploring the idea of starting your own bookkeeping business.

So, I’m guessing if you’re reading this post, you’re intrigued at how this whole bookkeeping as a business thing works. Below are a few very general and broad things you need to get started if this is something that piques your interest. And, please, keep in mind, these tips are what have worked for me. I am confident that other bookkeepers do things differently, have different preferences and systems, etc. So, take this all with a grain of salt.

YOU NEED A BASIC UNDERSTANDING OF COMMON FINANCIAL REPORTS

The whole point of bookkeeping is to categorize business transactions in a format that can be used both internally, but more importantly, can be used for tax purposes. So, if you have no idea what goes on a Profit and Loss Statement and what goes on the Balance Sheet, then you need to first educate yourself on what those reports mean and why they’re important.

YOU NEED TO UNDERSTAND THE BOOKKEEPING SOFTWARE

The day of keeping spreadsheets and paper ledgers are over. Unless it’s some small mom-and-pop store, at which case, they likely wouldn’t be hiring you, anyway. Quickbooks Online is the most popular bookkeeping platform, but there are others out there, too. Once you understand the workings of one, though, you should be able to figure out any of them as the basic functions are similar. I personally have almost all of my clients on Quickbooks Online, with a few needing the Quickbooks desktop version.

YOU NEED INSURANCE

This one might be a no-brainer to some of you, but it also might be one of those things that you just don’t even think about. But, yes, you do need some insurance to protect yourself and your clients in case you screw something up, say making payroll tax payments or something. So, call up your insurance agent, tell him what your plans are, and he’ll tell you what you need. It’s usually called “Errors and Omissions” insurance, but with some detail, he’ll be able to set you up with what you need.

YOU NEED CLIENTS

Ok, that one is stupidly obvious, but assuming you have a basic bookkeeping of the above mentioned financial reports and software, this is probably the thing that is mentally the hardest hurdle to jump for many people.

For me, I suffered from imposter syndrome. Heck, I still do sometimes. I knew I had the skills to offer bookkeeping services to people, but the thought of someone paying me to do the work made me feel like an imposter. Like, I wasn’t that good to get paid for what I do.

Another problem people run into is the uncomfortable, awkward task of marketing yourself to people. I despise arrogance. And it took me a little while to understand that marketing myself to others can be done in a way that doesn’t come across as arrogant.

Ok, but let’s say you don’t feel like an imposter because you know you’re a rockstar and you feel totally comfortable marketing yourself…where do you find clients?! For me, God totally threw me a bone. A family member’s CPA heard I was taking accounting classes and offered to mentor me in their firm, working part-time with my own schedule. I was upfront about my goals of starting my own bookkeeping business, but I think they thought they could convince me to stay employed with them. Regardless, it opened up the door to gain some clients working in the firm who then followed me when I branched off to be self-employed. And no, I didn’t sneakily steal those clients. I was the only person in that firm who had the right bookkeeping skills so the firm gave me their blessing.

I realize that my situation was a rare gem of a gift, but I do think that even if you don’t have a similar opportunity, there would be benefit in marketing yourself to accounting firms in your area that don’t offer bookkeeping services. As I’ve gained more clients I’ve been introduced to their CPAs who then, in turn, end up sending me referrals. So, I think establishing those connections can reap massive gains that just compound.

All it really takes is for you to find your first client. After that first client, you establish some confidence and you iron out some wrinkles in your process. It gets overwhelming to think about getting dozens of clients, but if you just focus on that first client, you’ll see a snowball effect.

YOU NEED A PRICING PLAN

This one is really hard to figure out when you’re just starting. After all, you’re not quite sure what value people will place on the work you do, or what the market says your work is worth, or even how you want to price your time. Regardless, you need to have some idea as to how you are going to have that first conversation with potential clients.

After doing this for about a year and a half, I’ve honed in my fee structure and it looks something like this:

• Cleanup work is charged hourly
• Ongoing bookkeeping work with expected tasks clearly defined (reconciling, payroll, sales tax, etc.) is a flat monthly rate.

I almost never quote a price without first seeing a client’s books or getting some answers to the following questions:

• How many bank accounts need to be reconciled? This includes checking, savings, credit cards, loans.
• What is your average transaction volume? They may have only one checking account but have hundreds of transactions coming through. Or they may have five accounts but only have 50 transactions total. The point is that the number of accounts is not indicative of their volume and the scope of work that needs to be completed.
• If they need payroll service – how many employees do they have? How often do they run payroll? Do you need me to do things like pay 401k contributions or submit wage garnishment payments?
• If they need sales tax service – what platform do they use to get the sales tax numbers? This is where understanding other software systems becomes crucial. Some management software programs have amazing accounting reports for sales tax. Others…grrrr. The point is, understanding what you might be up against is really important

After I’ve done my little “interview”, and ideally seen their books to verify, I give them my quoted price, but I be sure to tell them that I will adjust it (up or down) if I find the scope of their needs is different than anticipated.

If you have some grit and determination, and obviously the skills to either do the job or learn the job, starting a bookkeeping business can be a fantastic and rewarding endeavor.